Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Glenn D. Rudolph who wrote (53377)	4/28/1999 5:26:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Amazon, Though Still Unprofitable, Posts Giant Increase In Revenue Dow Jones On Line - April 28, 1999 16:55 NEW YORK -(Dow Jones)- Internet-retailing pioneer Amazon.com Inc. late Wednesday reported a narrower-than-expected loss for the first quarter on a gigantic increase in revenue. Amazon (AMZN), which has yet to report a profitable quarter since going public in May 1997, said its net loss came to $61.7 million, or 39 cents a share, compared with $10.4 million, or seven cents a share, in the year-earlier period. Revenue increased to $293.6 million from $87.4 million a year ago. However the latest results included $25.3 million in acqusition-related charges and costs. Excluding the charges and costs, the company said it would have posted a loss of $36.4 million, or 23 cents per share. The mean estimate of analysts surveyed by First Call was for a loss, excluding the items, of around 29 cents per share. Amazon said customer accounts rose to more than 8.4 million as of March 31 from 2.3 million a year ago. Between the ends of the fourth and first quarters, the number of customer accounts rose 2.2 million. The company also said repeat customers represented more than 66% of all orders made in the first quarter. Amazon said it plans to invest "more heavily" during the rest of this year than it has in past. The company plans to continue to expand its distribution network and invest in computer systems, personnel and product expansion. Although shares of Amazon fell Wednesday, the report could spark a jump in the company's stock, something that could prompt Amazon to convert recently issued bonds into stock before the first interest payment is due. The company's monster $1.25 billion convertible-bond deal made a splash in January. Amazon may call the convertible notes due 2009, market participants say. That might be the quickest call ever for a convertible. The first-quarter report - combined with positive investor reaction to recent acquisitions and pacts - could boost the stock. The stock fell $13, or 6.3%, to settle at $192.875 Wednesday. In the past 52 weeks, the stock has traded as high as $221.25 and as low as $12.86. The stock traded at around $122.875 when the convertible notes were priced. Under a provision, the company has the right to call the bonds at any time if Amazon's stock trades above $234.08 for 20 of 30 consecutive trading days. The first coupon payment on the notes is due in July. But Amazon could call them, force conversion, and avoid making the payment. "We'll just have to see what happens but it looks pretty close to happening," Sugiura said. Hopes that online-auction firm eBay Inc. (EBAY) and Amazon would deliver strong first-quarter results earlier this week lifted electronic-commerce stocks in recent days. Late Monday, eBay results that exceeded even the most optimistic expectations for the first quarter. Amazon has made no secret of its intentions to expand far beyond the market for books and is already selling music, videos and gifts on its site, as well as directing its customers to other electronic retailers like Drugstore.com and Pets.com. In addition, the company recently launched a online auction service that will compete with eBay. And Amazon Monday announced three small purchases of electronic companies, including one that will give it a foothold in the market for rare books and music. The company also said it will begin offering electronic greeting cards. According to Volpe Brown & Whelan Co. analyst Derek Brown, the market caps of online retailers reflect the rapid growth of the electronic-commerce business and "the enormous market opportunity in front of these companies." Unlike many of their offline competitors, Brown noted, online retailers have the potential to reach a global audience very easily and in a very cost-effective way. The stocks of many Internet concerns have soared into the stratosphere in recent months on the premise that strong revenue growth will eventually produce strong profits. The shares have been propelled by an Internet-stock frenzy that may be the biggest speculative bubble since the biotechnology craze of the early 1990s. History shows such speculation often ends badly and the Internet boom may be especially vulnerable because of a crucial but widely overlooked fact: The Internet, a coldly efficient medium, is hostile to profit margins.