Troubled Internet retailing giant Amazon.com faces a self-imposed deadline to turn a first-ever profit as the company struggles against flat sales numbers and skeptical analysts.
The success or failure of the venerable Internet store will be a landmark event in online retailing, which started with a bang but has now withered. Amazon was one of the first Internet retailers, selling books online in 1995. The company now sells, besides books, CDs, videos, electronics, tools and a number of other consumer goods.
Amazon's CEO Jeff Bezos, who was once named Time magazine's Man of the Year, promised earlier this year that the Seattle-based company will finally become profitable, at least using the company's own "pro forma" measures -- excluding a number of expenses -- by the end of 2001.
But during Tuesday's third quarter results, Amazon executives warned that sales growth would continue to slow into the crucial Christmas holiday season -- a forecast which prompted Merrill Lynch's influential analyst Henry Blodget to downgrade his advice on the company's shares to a "neutral" from an "accumulate" grade.
"The company continues to make progress towards profitability, but revenue growth continues to decelerate," Blodget said in a note to investors.
"With little visibility into 2002 ... and the prospect for additional declines in the core business, the stock appears expensive."
That is a stark change from when Blodget claimed during the Internet boom for two years ago that Amazon's stock was worth around US$400 per share.
On Thursday, Amazon shares were hovering around US$7.60. The company has a 52-week share price high of US$40.87.
With other big online retailers dropping like flies, Amazon has survived but its future remains uncertain as it continues to bleed cash.
The company has reached agreements with brick-and-mortar retailers such as Toys R Us and Borders Books to handle their online operations, which may give it some insulation from the problems of Internet retailing.
But analysts say that the fall in consumer confidence following the Sept. 11 terrorist attacks is likely to cause further turmoil among retailers.
Amazon executives predict sales for the three months to December, from which it derives the bulk of its revenues, are expected to come either flat or up to 10 percent higher than last year's US$972 million.
That is down on its previous forecast of a 10 to 20 percent rise, and lower than the US$1.099 billion Wall Street analysts were expecting.
Those numbers have forced Amazon executives to hedge on their profit promises. Warren Jenson, Amazon's chief financial officer, said that while the company continues to move towards profit "there are no guarantees."
There are some reasons for optimism. Research group GartnerG2 predicts online holiday retail sales worldwide are expected to grow 39 percent this year.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS