Amazon Says Sales Up in Last Quarter
By GENE JOHNSON, Associated Press Writer
SEATTLE (AP) - Online retailer Amazon.com (news - web sites)
released preliminary data Monday that shows it was more efficient
and reached its sales goals in the last quarter of 2000, despite the
slowing economy.
Analysts said the news should put to rest any concerns the company
will need to raise more cash to survive through 2001. But they also
said Amazon's sales growth was lower than expected and that could
lower estimates of how profitable it can become in the next three to
five years.
``Yes, they'll live. Yes, they'll be profitable, but not as profitable as some expected,'' said Jeffrey
Fieler of Bear Stearns in New York.
Many analysts predicted Amazon could grow as much as 45 percent over the next three to five
years, Fieler said. News that its net sales increased just 40 percent over the fourth quarter of '99
could bring those growth estimates down as low as 35 percent, he said.
Amazon's numbers are unaudited and will not be made official until later this month, but Fieler said
he expects Amazon to meet his expectations of a 25- to 26-cent loss per share.
The company did not discuss its net loss for the quarter.
Amazon said it gained 4 million customers last quarter, for a total of 29 million, and that customers
spent an average of $58, 25 percent more per transaction than in the same period of 1999. The
company said it expects to report 20 percent less inventory and net sales of $960 million, 40
percent better than $676 million in the last quarter of '99.
Given the softening economy, ``We're pretty doggone proud of being able to meet the guidance
which we gave,'' chief financial officer Warren Jenson said.
Allyson Rodgers, an analyst with Ragen MacKenzie in Seattle, said she would not change her
expectation that Amazon will start breaking even by the end of this year.
``There's not a lot of visibility in terms of online sales. Investors were nervous about that,'' Rodgers
said. ``Having the information now should help the stock, even though they didn't blow the doors
off the quarter.''
Amazon was trading at $91.50 last January before crashing along with the rest of the dot-com
economy. It closed at $14.94 Monday, up 38 cents.
The company said more than 35 percent of its U.S. customers bought items other than books,
movies or music - an indication that its plan to offer everything under the sun is working, it said.
Amazon's electronics store was its second most popular one, the company said, behind books and
related items.
Rodgers said the $58 average per transaction is impressive evidence that customers are buying
electronics and other goods.
``Their customers are shopping outside of media products, which means the company's going to be
successful,'' Rodgers said.
Fieler said that assuming investments and other cash equivalents remained the same, Amazon
generated about $200 million cash in the quarter.
Still, its gross margin was about 22 percent, a few points lower than expected. Fieler attributed
that to a free-shipping promotion Amazon offered before the holidays.
``All in all, it's not bad news for a stock trading at $15,'' Fieler said. ``But I don't think it's going to
light a fire under it, either.'' |
