>Published: January 9 2001 00:09GMT | Last Updated: January 9 2001 00:43GMT
Amazon.com's performance for the fourth quarter was slightly below expectations, analysts said on Monday night, as the largest online retailer released preliminary details of how it performed during the crucial holiday selling season.
Revenues for the three months to December would be in excess of $960m, Amazon said after the close of normal trading on Monday. Though the figure was 42 per cent above its sales for the comparable quarter of 1999, Amazon was expected to report its first $1bn-plus quarter.
Analysts were more disappointed in Amazon's gross profit margins. The group said gross profit for the quarter would be up 140 per cent at $210m, but Wall Street had expected a figure closer to $230m.
"Margins were more than one [percentage] point lower than we were looking for," said Mark Rowen of Prudential Securities.
Low profitability on consumer electronics and a highly promotional general retail climate had contributed to lower gross margins, analysts said, despite the boost to profitability from Amazon's alliance with toysrus.com, which provides fee revenues.
However, Amazon said its operating losses would be within the range of expectations at less than 7 per cent of sales, compared with a 26 per cent pro forma operating loss a year earlier.
Amazon, which saw dozens of smaller retailing rivals run out of money in the last 12 months, moved to reassure investors about its cash position, in response to some analysts' concerns.
Warren Jensen, chief financial officer, said the group entered 2001 with about $1.1bn of cash and marketable securities - slightly more than the $1bn it had previously indicated.
The group, which will report fourth-quarter results on January 30, pulled away from rival online-only retailers in terms of visitors to its website this holiday. However, it has faced stiffer online competition from traditional retailers such as Wal-Mart and JC Penney. |
