Amazon.com Inc.'s losses in the fourth quarter
were eight times wider than they were a year ago, despite the fact
that the giant Internet retailer's sales more than doubled from the
same period in 1998.
The results announced Wednesday were below Wall Street analysts'
estimates, but its stock rose sharply in after-hours trading.
Seattle-based Amazon lost $185 million, or 55 cents a share, for
the quarter ended Dec. 31, compared with a loss of $21.99 million,
or 7 cents a share, in the last quarter of 1998.
Sales for the quarter totaled $676 million, up from $253 million
a year ago.
Despite its soaring revenues, Amazon executives warned Jan. 5
that its losses for the quarter would be larger than expected
because it overstocked for holiday season.
Analysts surveyed by First Call/Thompson Financial estimated a
loss of 48 cents per share. Unofficial "whisper numbers," which
can be a more realistic estimate, pegged the losses at 45 cents per
Still, investors seemed satisfied with the results that were
announced after financial markets closed, pushing Amazon's shares
up $5.43 to $74.87 in after-hours trading on the Nasdaq Stock
Market. Earlier in the day, Amazon closed at $69.43, up $2.
While Amazon has never turned a profit since it first starting
selling books online in 1995, the company has clearly built itself
into a leading merchant on the Web today.
During the fourth quarter, it attracted more than 3.8 million
new customers, bringing its customer base to more than 17 million
people - well ahead of most of its rivals.
Amazon not only seeks to woo shoppers to its site, but it wants
people to keep coming back. Repeat customer orders represented more
than 73 percent of its orders during the fourth quarter, compared
with 72 percent in the third quarter of the year.
In the last year, the company has been aggressively expanding
itself into an Internet superstore. During the fourth quarter, it
added a number of new product offerings to its site, including
software, video games and home improvement products.
The company said its book business, which now represents less
than half of Amazon's total sales, was profitable in the fourth
quarter, and the company expects it to be profitable through 2000.
Amazon.com's chief financial officer, Warren Jenson, said the
company's overall operating loss will decrease later in the year.
For all of 1999, Amazon lost $390 million, or $1.19 per share,
compared with losses of $74 million, or 25 cents per share, in
1998. Annual revenues came in at $1.64 billion, up 169 percent from
the $610 million reported for all of 1998.