Amazon Says It’s On Track for Profits began a day-long meeting with analysts in
Seattle today by reiterating its forecast of pro forma profitability in the
fourth quarter and disclosing that its average U.S. customer shops 2.7 times
a year, with an average order size of $54.

Amazon execs told the assembled analysts that about 15 million customers have
shopped at the U.S. site in the past 12 months. And the CFO said the company
expects to achieve a pro forma operating profit in the fourth quarter of this

The company also said that it is launching a new, targeted e-mail
merchandising program called Amazon Extra, designed to drive its average
order size up and increase cross-shopping opportunities.

The program makes product recommendations based on customer purchases – for
instance, bundling the movie “Spartacus” for purchasers of “Gladiator” and
offering them a reduced price if they buy both.

A new institutional book sales plan also is in the works, the company said,
as well as a new PC store.

Amazon stock was down 74 cents in mid-day trading, at $16.17.

Early in the meeting, Warren Jenson,’s chief financial officer,
told the assembled analysts that “We are just beginning to tap the global
market … (and) we are bullish on our 2002 and 2003 growth prospects.”

Prior to the meeting, Bear Stearns analyst Jeffrey Fieler reportedly raised
his estimates for Amazon, saying that he expects the company to lose 21 cents
in the second quarter, narrower than his previous forecast of a loss of 23
cents. For the year, he expects Amazon to lose 69 cents, rather than an
earlier projection of 73 cents. He cited the company’s revenue strength and
“operational efficiencies.” He also reiterated his “attractive” rating and
12-month price target of $30.

Goldman, Sachs, in its AMZN 2001 Analyst Day Handbook, said that “near term,
we think Amazon’s results will largely get better from here (with a potential
re-acceleration in growth as the company laps more normalized quarters in
2001) and that increased visibility of profitability combined with inventory
turn acceleration should lead to an inflection point in the stock.”

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