Amazon.com Ekes Out $1 Million Profit24 Jul, 2002 By: Joan Villa
Amazon.com's books, music and video group grew 6 percent to $412 million in second quarter sales, with pro forma operating profit up 26 percent to $49 million compared to the year-ago period.
The online retailer tallied 21 percent revenue growth overall with quarterly net sales of $806 million, eking out a $1 million operating profit versus a $140 million loss a year ago. Pro forma operating profit was $26 million, or 3 percent of net sales, exceeding the company's guidance of $5 million to $15 million.
However, overall the company reported a net loss of $94 million, or 25 cents per share, compared with a loss of $168 million, or 47 cents a share, a year earlier. Excluding special items, the pro forma loss was $4 million.
Looking forward, Amazon confirmed current expectations of 18 percent sales growth this year, suggesting a slowdown in year-over-year sales growth and leading wary analysts to worry whether the stock was worth a value equal to 100 times its estimated 2003 earnings. The stock's downward trend continued on heavy volume even on the day following the earnings report, when other retail stocks were rebounding.
Amazon recently reduced prices on electronics, tools and bestselling CDs and DVDs and introduced free shipping on orders over $49, which was quickly matched with a free-shipping offer by competitor Buy.com.