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To: Jill who wrote (47885)	1/26/2009 1:25:04 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

11:18 AMZN Amazon.com: Expect gross margins were negatively impacted by promotional environment - McAdams Wright (49.27 -1.36) McAdams Wright notes that AMZN is scheduled to report its 4Q08 earnings results this Thurs after the market close. Firm expects the co to report earnings of $0.42 per share (cons $0.39), which they've revised lower from their previous est of $0.46 per share on a combination of more conservative sales and margin assumptions. Firm expects that AMZN's gross margin was negatively impacted by the widely promotional environment within the retail sector during the holiday season. Although the co continuously lowers prices, reflected in its ongoing margin deterioration, firm expects that the impact was greater than usual in Q4 as AMZN adjusted its own pricing in order to preserve its traffic counts. That said, firm's assuming that the co's gross margin fell to 19.8% from 20.6% in 4Q07.