Amazon.com Inc's first-quarter loss narrowed as sales of books, movies and music rose in the US and the world's largest Internet retailer benefited from cost-cutting. The company's shares rose as much as 8.3 percent.
The loss narrowed to US$23.2 million, or US$0.06 a share, from US$234 million, or US$0.66, a year earlier, Amazon.com said. Sales surged 21 percent to US$847.4 million from US$700.4 million.
Amazon.com boosted sales of books, movies and music -- its largest category -- by 8.2 percent in the US, helped by 30 percent discounts on books costing US$20 or more and free shipping for orders of more than US$99. Chief Executive Jeff Bezos has cut costs by closing two customer-service centers, a warehouse and firing 1,500 workers, while improving shipping efficiency.
"It was a very good quarter," said Alan Loewenstein, co- manager of the US$800 million John Hancock Technology Fund, which owned 917,000 Amazon.com shares at the end of December, according to a filing. "The numbers were better than anyone expected." Amazon.com's strategy of offering lower book prices and free shipping helped lure new customers as operating expenses declined 45 percent to US$221.4 million, Chief Financial Officer Warren Jenson said. Amazon.com said the 30 percent discounts will now apply to books costing US$15 or more.
"We're pleased what we've done on the pricing front," Jenson said in an interview.
Excluding some expenses related to acquisitions and stock options, Amazon.com's loss would have been US$4.84 million, or US$0.01 a share. On that basis, results beat the average estimate of a US$0.09 loss, according to analysts surveyed by Thomson Financial/First Call.
Seattle-based Amazon.com's shares rose as high as US$15.23 after the close of regular trading when they fell US$0.25 to US$14.06. The company released its earnings after the close of regular US markets.
Amazon.com raised its forecast for 2002 income from operations excluding certain costs to more than US$100 million from the more than US$30 million it projected in January.
The company also increased its revenue forecast, saying sales will rise by more than 15 percent this year. It earlier expected a 10 percent gain. The company had sales of US$3.12 billion in 2001.
Amazon.com said second-quarter revenue will be US$765 million to US$815 million, more than the US$750.6 million average estimate of analysts surveyed by First Call. Operating income before certain expenses will be between US$5 million and US$15 million, the company said.
"They're showing the operating leverage in the model and they're doing it in an economy that's still pretty slow," said Morris Mark, general partner of New York-based Mark Asset Management, which owned 191,000 Amazon.com shares at the end of December.
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