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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Alomex who wrote (141712)	4/20/2002 1:56:41 PM
From: H James Morris	Respond to of 164684

Amazon.com update. >>4/19/2002 SEATTLE (Reuters) - Amazon.com Inc. (AMZN.O) is unlikely to post another surprise net profit when it reports quarterly earnings next week, but the online superstore will post a smaller loss than a year ago due to unexpectedly strong Internet sales, analysts said on Friday. Seattle-based Amazon is expected to lose from 7 to 12 cents a share for its first quarter, with a consensus estimate of a loss of 9 cents a share, according to Wall Street tracking firm Thomson Financial/First Call. Amazon lost 21 cents a share a year earlier. Revenues are seen growing some 15 percent, to around $805 million, compared to $700 million a year earlier, as the world's biggest Internet retailer keeps drawing customers and their wallets, analysts said. Amazon's own guidance is for an operating loss of between $16 million and breakeven on revenues of between $775 million and $825 million. A repeat of its fourth quarter, when it surprised investors and analysts with a small net profit of $5 million, or 1 cent per share, is unlikely given the seasonal first quarter shopping slowdown when consumers mind their budgets after the holidays, analysts said. Even so, overall Internet sales were strong for the first three months, meaning Amazon could show profits on an operational basis that excludes expenses such as some $30 million in interest payments on debt. ''Overall e-commerce activity has been better than expected. The economy is not exactly roaring, but certainly the first quarter turned out to be better than expected for consumer spending,'' said Safa Rashtchy, an analyst with U.S. Bancorp Piper Jaffray. GOOD DEALS EQUAL GOOD SALES Lower prices and free shipping on orders over $99 have also helped lift sales, especially among the core books, music and video segment that saw growth reignite last quarter. ''Free shipping is definitely helping because it is driving consumers who were just there kicking the tires to transact,'' said Deutsche Bank Alex. Brown analyst Jeetil Patel. Amazon's international operations, especially its German and British online stores, are expected to be big growth spots as well, analysts said. Patel expects Amazon will at least break even on its operations and said he hopes Amazon executives will give more details about how it will reach its goal of generating operating cash flow for this year. ''I think we're getting close to that point but we are still looking for guidance from company on specific milestones and how they will get there,'' Patel said. One way will be to continue to cut costs and better manage inventory, tasks that were at the heart of Amazon's drive to turn its first profit last year. ''There are still some savings to be had and it will continue over the year but I don't expect it all up front here in the first quarter,'' Patel said. Investors will also be looking for updates on how service agreements with partners like Toy R Us Inc. (TOY.N) and Target Corp. (TGT.N) are faring. Target is so far the largest partner of Amazon, which offers some Target goods on its own site and is to operate a new Target Web site later this year. If indeed all these elements fall in Amazon's favor, Amazon could raise guidance for its current, second quarter, for which it is now expected to lose between 8 and 11 cents a share, compared to a loss of 16 cents a year earlier, analysts said. Sales for the second quarter are now seen at around $750 million versus $668 million a year earlier. Amazon's stock, which closed up 27 cents at $14.53 on Friday, has nearly tripled off a year low of $5.51, making it unlikely it will see large gains unless the company reports very bullish guidance next week, Patel said. ''It's trading at a pretty fair valuation at this point, so we are looking for data points for upside throughout the year,'' Patel said. digitalmass.boston.com