Amazon’s sales boom keeps alive profit goal

Associated Press

SEATTLE — Third-quarter sales at Amazon.com were up 79 percent from a year ago, helping the company’s loss for the period come in under Wall Street’s expectations.

For the three-month period ending Sept. 30, Amazon.com lost $240.5 million, or 68 cents per share. In the year-ago period, the online retailing giant lost $197.1 million, or 59 cents per share, the company said Tuesday.

Revenue rose to $637.9 million from $355.8 million a year ago.

Wall Street analysts had been expecting a pro forma loss of 33 cents per share, according to First Call/Thomson Financial. Company officials credited increased internal efficiencies with the shrinking loss.

"I’m surprised by the numbers," said Gene Alvarez, an electronic commerce analyst with the META Group. "They got the ‘e’ part of e-commerce right, and it’s nice to see them focus on the commerce part."

Although shares of Amazon.com were up as much as $1.50 earlier in the day, they closed down 44 cents to $29.56 on the Nasdaq Stock Market. In after-hours trading, shares rose to $32.06.

"This was a strong quarter for Amazon.com," said Warren Jenson, the company’s chief financial officer. "We are driving toward profitability, and we surpassed our key internal operational and financial objectives."

Amazon.com chief executive Jeff Bezos noted that its new businesses, such as electronics, toys, computer games, garden tools and kitchenware, were thriving. The company’s electronics business is now the second-largest section of Amazon.com, just behind the original books division in sales.

"The new product categories work. It’s as simple as that," said Bezos, noting that some Wall Street analysts had thought otherwise. "It’s very, very clear that these businesses are growing, and growing rapidly."

Going into the fourth quarter, when Amazon.com usually sees a major holiday sales surge, the company tried to reassure investors by noting it had $900 million in cash and short-term assets on hand — more than enough to get it through 2001.

Still, Amazon.com will spend some $200 million between now and March 31 to ensure that it keeps its holiday record for deliveries intact. Last year, more than 99 percent of its holiday shipments arrived before the holidays.

After that, Bezos said the company will be "cash-flow positive," meaning that although there will be losses, there will be enough money coming in through regular operations to keep the company running.

It’s the last hurdle before outright profitability, which Bezos and Jensen still refuse to comment on.

Bezos said the company is "really excited about Christmas" and will work to expose the breadth of its product offerings to its customers. Bezos noted that only 21 percent of Amazon.com customers bought something other than books, music or videos on the site.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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