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

To: Gary Wisdom who wrote (37026)	1/26/1999 11:03:00 PM
From: Gary Wisdom	Read Replies (2) \| Respond to of 164684

From WSJ Interactive Edition January 26, 1999 Amazon Tops Analysts' Estimates, Sets Ambitious Plans for New Year An INTERACTIVE JOURNAL News Roundup Amazon.com Inc. reported a narrower-than-expected loss for its latest period as revenue soared, fulfilling expectations the company set earlier this month. And the company set an ambitious plan for 1999, saying it intends to become "the world's most customer-centric company." For its fourth quarter, the Seattle online retailer reported a net loss of $46.4 million, or 30 cents a share, compared with a net loss of $10.8 million, or 8 cents a share, in the year-ago quarter. The just-ended quarter included $24.2 million in merger- and acquisition-related charges; excluding those charges, Amazon reported a net loss of $22.2 million, or 14 cents a share. That topped analysts' consensus expectations for a net loss of 18 cents a share. Revenue, meanwhile, jumped to $252.9 million from $66 million in the fourth quarter of 1997. Earlier this month, Amazon said it would report sales in that range. Amazon said cumulative customer accounts increased by more than 1.7 million during the fourth quarter to more than 6.2 million as of Dec. 31, 1998, an increase of more than 300% from 1.5 million accounts at the end of 1997. Repeat customer orders -- a key indication of e-commerce's staying power -- represented more than 64% of orders placed during the quarter. During the fourth quarter, Amazon said its music sales grew to $33.1 million, a 130% increase over sales of $14.4 million in the third quarter. * Video sales -- which began Nov. 17 -- were also described as strong. Combined, Amazon said, these "expansion areas" accounted for 25% of consolidated fourth-quarter sales. Combined sales in the U.K. and Germany, meanwhile, nearly quadrupled over the third quarter. "We have one strategy at Amazon.com -- provide the customer with the best shopping experience," said Amazon founder and Chief Executive Jeff Bezos, who hailed "an incredible holiday season and an exceptional year." Mr. Bezos took the opportunity to make it clear that Amazon's ambitions were hardly declining as the company looked to 1999. The company intends to "build out a significant distribution infrastructure," he said, and will also "continue to enhance the scope and quality of the products and services that we provide to our customers." "Amazon.com is still a small and young company relative to many offline retailers, and we must ensure that we build the strongest customer relationships possible during this critical period," he said. "In 1999, we expect to invest even more aggressively than we have in the past. Our goal is nothing short of building the world's most customer-centric company." Amazon had told Wall Street early this month that while its fourth-quarter revenue would be about $250 million -- well above analysts' projections -- its bottom-line results would be roughly in line with expectations due to margin pressure. That put a lid on any whispering about the company's fourth-quarter numbers. Amazon posted a split-adjusted loss of 8 cents a share in the fourth quarter of 1997. Amazon's $250 million revenue estimate came as a disappointment to some overzealous investors who had pushed the company's stock up sharply in the preceding weeks and were hoping that strong holiday sales on the Web would push revenue above whisper estimates of $300 million. But the revenue projection from the company was still above even the most optimistic outlooks of most Wall Street analysts, who maintained that $300 million was never a realistic number. Most analysts had official revenue projections somewhere in the range of $170 million to $190 million, though most expected the company to do somewhat better. "They were well in excess of what I had published and even my own inklings of upside," Volpe Brown Whelan & Co. analyst Derek Brown said before the earnings were released. Despite the better-than-expected revenue number, Amazon cautioned earlier this month that significant sales of music and videos -- which have lower margins than books -- hurt margins, as did pricing pressure. Amazon also blamed the margin disappointment on higher "fulfillment expenses," referring to the costs the company incurred to make sure orders were filled on time. Concerns over pricing pressure in the e-commerce business have pushed down shares of Amazon and other online retailers in recent days. Still, BancBoston Robertson Stephens Inc. analyst Keith Benjamin maintained that Amazon's well-known brand name and its expertise in filling orders gives the company a huge advantage in attracting customers. "It's not about price," he said.