Amazon.com shares were sinking today as the impact of its slowing revenue growth became apparent to investors. But elsewhere, there was positive news on the earnings front from other e-commerce companies such as 1-800-Flowers.com and Ticketmaster.
Goldman Sachs analysts told clients that despite slower top-line growth as consumer spending weakens, Amazon “remains positioned to achieve fourth quarter profitability with revenues as low as $970 million.
The stock was down $1.93 or more than 20 percent in mid-day trading to $7.65, after pushing upwards yesterday before the company’s third-quarter earnings report came out.
Amazon posted net sales of $639 million compared to net sales of $638 million in the third quarter of 2000. Revenues were down slightly from the $650 million consensus estimate from analysts.
“Continued execution to reach break-even remains critical for Amazon and visibility on
achieving this goal will be the main driver of stock price performance,” GS said.
Amazon agrees; its Chief Financial Officer Warren Jenson said in a conference call yesterday that “reaching fourth quarter profitability requires no heroics, just execution.”
Goldman Sachs, meanwhile, reduced its fourth quarter revenue estimate for Amazon to $1.010 billion from $1.060 billion and maintained its fourth quarter EPS estimate of a fully diluted loss of 7 cents.
Amazon’s shares “will likely be range-bound until investors can get a better read on the achievement of fourth quarter positive EBIT,” GS said. “Growth continues to slow in a declining consumer spending environment and the company has limited flexibility to induce demand given the priority of reducing costs to achieve profitability.”
Elsewhere on the e-commerce front, Westbury, N.Y.-based 1-800-Flowers.com
reported record revenues of $79.2 million for the first quarter of fiscal 2002 and cut its loss.
The company reported a loss of $8.95 million, or 14 cents a share, compared with a loss of $22.5 million, or 35 cents a share a year ago. Analysts on average had been expecting a loss of 16 cents a share.
The company’s fiscal first quarter, which includes the summer months with no major gift-related holidays, is its lowest revenue quarter.
Looking forward, 1-800-Flowers.com also said that it anticipates achieving total revenue growth during the current fiscal second quarter (ending Dec. 30) of approximately 25 to 28 percent to a range of approximately $168-$172 million. The company anticipates being both EBITDA and EPS positive for the fiscal second quarter with EBITDA in a range of approximately $4.5-to-$5 million and net income of $1.3 million to $1.9 million, or 2 to 3 cents per share.
Meanwhile, Los Angeles-based Ticketmaster posted third quarter revenues up 7.1 percent to $157.5 million. Pro forma per share earnings were 4 cents, compared with a loss of 3 cents per share in the year-ago quarter.
On a fully diluted basis, Ticketmaster reported a third-quarter net loss of $49.4 million or 35 cents a share, compared with a loss of $51.2 million or 36 cents per share a year ago.
Earlier this month, Ticketmaster warned of a third-quarter revenue shortfall due to event cancellations and postponements in the wake of the deadly Sept. 11 attacks, but said it was encouraged by a rebound in the last week of the quarter.
