Amazon was on the worse side of every metric. There is not really a plus in this entire pre-release although the spin tries to give it one:
"01/08 18:07
Amazon.com Says 4th-Qtr Sales Exceeded $960 Million (Update2)
By Greg Wiles
Seattle, Jan. 8 (Bloomberg) -- Amazon.com Inc. said fourth- quarter sales exceeded $960 million, a gain of more than 40 percent, as consumers bought electronics, kitchen products and tools from the largest Internet retailer.
Sales missed the average analyst estimate of $1.01 billion, compiled by First Call/Thomson Financial. The preliminary calculation is in line with Amazon.com's own forecast of $950 million to $1.05 billion.
``This miss could have been worse given what's going on out there,'' said ABN Amro analyst Kevin Silverman, who has a ``buy'' rating on the shares and had forecast $1.01 billion in sales. Amazon.com is scheduled to report complete results Jan. 30.
Shares of Seattle-based Amazon.com rose as much as 64 cents to $15.58 in after-hours trading after rising 38 cents to $14.94 in regular trading. Its shares had fallen 79 percent in the past year.
Wal-Mart Stores Inc., Target Corp. and other traditional retailers had their worst holiday season in at least five years, as job cuts, higher fuel prices and declining stock markets curbed consumer spending. Sales of other online retailers such as EToys Inc. also fell below forecasts.
A television advertising campaign, a free-shipping promotion and an alliance with Toys ``R'' Us Inc. to sell toys on the Web helped Amazon.com become the most-visited online retail site this holiday shopping season, according to Nielsen/NetRatings. The company shipped more than 31 million items from Nov. 2 through Dec. 23.
Amazon.com added 4 million customers in the quarter, the company said in a statement. That's in line with Silverman's estimate of 4.2 million.
``At a cumulative customer count of 29 million, they're now on par with how many customers Lands' End has,'' Silverman said.
More than 35 percent of Amazon.com's U.S. customers bought from a store other than books, music or DVD/video, the company said. The electronics store was Amazon.com's second biggest behind books for the second quarter in a row. The company also sells hardware and software and offers auctions.
Company officials couldn't immediately be reached for comment.
Promotions Cut Gross Profit
While promotions helped boost sales, they may have hurt Amazon.com's gross profit, analysts said. Discounts reduce the amount of money made on each sale.
Amazon.com said gross profit was more than $210 million, an increase of 140 percent from a year earlier. That was less than the $230 million estimated by Ravi Suria, a convertible bond analyst at Lehman Brothers Inc.
Gross margin, or the percentage of sales that remains after product costs are subtracted, rose to 22 percent from 13 percent, Silverman said. He had forecast gross margin of 23.5 percent.
``It looks like they gave more away than I would have thought on free shipping,'' Silverman said.
Amazon.com said it had an operating loss before merger and compensation costs of less than 7 percent of sales, compared with 26 percent last year. Silverman had estimated an operating loss of 5.3 percent.
``They're into the single-digit operating loss, which is what they targeted a year ago,'' he said.
Inventory
The company said it has a year-end inventory balance of less than $175 million and is entering 2001 with about $1.1 billion in cash and marketable securities.
Analysts have forecast a fourth-quarter loss of 26 cents a share excluding merger and compensation costs, the average estimate of those polled by First Call.
In the year-earlier quarter, Amazon.com had revenue of $676 million in and a loss of $323.2 million, or 96 cents a share. Excluding merger and compensation expenses, the loss was $184.9 million, or 55 cents.
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