Internet retailer Amazon post first quarterly profit ever; tops Wall Street expectations
Tuesday, January 22nd 2002, 12:00 am
By: News On 6
SEATTLE (AP) _ Helped by lowered prices and companywide penny-pinching, pioneering Internet retailer Amazon.com posted its first net profit ever in the fourth quarter, beating its own forecasts and Wall Street's expectations.
For the quarter ended Dec. 31, the 6-year-old company said Tuesday it earned $5 million, or 1 cent a share, compared with a net loss of $545 million, or $1.53 per share, in the year-ago period.
``We nailed this quarter from a financial perspective,'' chief financial officer Warren Jenson said in a conference call with reporters.
The results were on net sales of $1.12 billion, a 15 percent increase over sales of $972 million in the fourth quarter of 2000, showing the company had healthy sales in the all-important holiday quarter despite what was for many retailers a lackluster season.
Jenson said the company was helped by lowered book prices _ which prompted strong sales in the holiday quarter _ and a yearlong focus on cutting extra expenses.
``From operations to technology to international, everybody participated,'' Jenson said. ``We just did it simpler and better.''
Operating expenses were down 24 percent in the fourth quarter, compared with the year-ago period, Jenson said.
Jenson said Amazon.com has been affected by the stagnant economy ``like everyone else,'' but hopes to continue to lure shoppers by cutting prices.
On Tuesday, the company announced a plan to offer free economy shipping on some orders of $99 or more.
The Seattle-based company also recorded a ``pro forma'' net profit, which excludes certain costs such as losses from investments, of $35 million, or 9 cents per share, compared with a pro forma net loss of $90 million, or 25 cents per share, in the year-ago period.
Analysts polled by Thomson Financial/First Call expected a pro forma net loss of 7 cents per share for the latest period.
Despite the strong results in the fourth quarter, Amazon said it still expects operating results ranging between break-even to a loss of $16 million in the first quarter ending March 31, on net sales of between $775 million and $825 million. The company did not offer guidance on net income estimates.
For the fiscal year ended Dec. 31, the company recorded a net loss of $567.2 million, or $1.56 per share, compared with a net loss of $1.41 billion, or $4.02 per share, in 2000.
Net sales were $3.12 billion compared with $2.76 billion in fiscal 2000.
Jenson said the company ended the quarter with about $1 billion in cash, slightly higher than the $900 million the company had originally projected.