I am slowing down!! In the midst of all that reading, I missed this gem re; Mark's diamond. Remember all that hype about hiring walmart talent for execution, and how the bears all said, "what execution, we thought that amzn was a cyber company, no real world costs." well kids read this quote slowly and bulls, before you start stammering out justifications and explanations that back up your view, just think quietly if this sounds like a company ready to expand into all sorts of industries when they can't even handle the book volume they've got.
Amazon recently hired a new logistics manager, Jimmy Wright, from
Wal-Mart Stores Inc. That should help Amazon significantly in "managing
the entire supply chain as we grow," Mr. Bezos said. While Amazon's
on-line ordering system is state of the art, its warehouses and shipping
departments aren't as advanced.
The Wall Street Journal Interactive Edition -- July 23, 1998
Amazon.com Posts Better Revenue;
Net Loss Is in Line With Estimates
By GEORGE ANDERS
Staff Reporter of THE WALL STREET JOURNAL
Amazon.com Inc., the Seattle on-line bookstore, reported that sales more
than quadrupled in the second quarter, to $116 million, while the company
incurred a $21.2 million net loss.
The revenue growth was even faster than Wall Street analysts had
expected, and the company's loss, adjusted for noncash charges, was
slightly narrower than expectations.
Steve Horen, an analyst at NationsBanc
Montgomery Securities, said he was
impressed by Amazon's "great customer
growth" in the quarter. Amazon said it added
880,000 customer accounts in the quarter,
bringing its total to 3.1 million.
Amazon also said 63% of its business came
from repeat customers, up from 60% in the first quarter. "You want to see
that number going up," said Shaun Andrikopoulos, an analyst at BT Alex.
Brown & Sons. "It shows they have a strong franchise."
Amazon's sales growth didn't come cheaply, though. In the latest quarter,
the company said it spent $26.5 million on marketing, equivalent to 23%
of sales. By comparison, Amazon's first-quarter marketing outlays totaled
$19.5 million, or 22% of sales. The company has spent millions of dollars
to make its name ubiquitous on the Internet; it also has increased its radio
advertising and has handed out discount coupons in several cities.
Joy Covey, chief financial officer, defended the marketing outlays, saying
they are "designed to help build a lasting, important company, and, long
term, to provide shareholder returns."
Amazon, formed in 1994, has steadily reported losses since going public
last year. Nonetheless, its stock has been a highflier, as investors are
attracted to the company's rapid growth and its leadership position in
electronic commerce.
Amazon announced its results Wednesday after trading closed, but during
the day its stock rose $1.9375 a share, to $134, in Nasdaq Stock Market
trading. In after-hours trading reported by Instinet Inc., Amazon changed
hands at $135, up a further $1.
During the quarter, Amazon began selling compact disks on-line. The
company's chief executive officer, Jeff Bezos, declined to give specific
data about music sales, but said the company is "super pleased" with
results so far. Mr. Bezos also confirmed that Amazon is considering an
expansion into on-line video sales; he declined to comment on analysts'
predictions that such a move could be about six months away.
Amazon recently hired a new logistics manager, Jimmy Wright, from
Wal-Mart Stores Inc. That should help Amazon significantly in "managing
the entire supply chain as we grow," Mr. Bezos said. While Amazon's
on-line ordering system is state of the art, its warehouses and shipping
departments aren't as advanced. Amazon calculated that its
second-quarter loss, on a pro-forma operating basis, was $11.6 million.
That calculation omits $5.4 million of amortization charges related to three
small aquisitions in April; it also leaves out noncash interest charges
associated with Amazon's bond debt. |
