Electronics Store Boosts Amazon.com's Net Sales

By Jeff Malester -- TWICE, 11/6/2000

SEATTLE -Getting a lift from online sales of electronics, Amazon.com reported a 79 percent jump in net sales for the third quarter ended Sept. 30, reaching $638 million for the three months, compared to $356 million in the year-ago period.

Amazon.com, however, extended its net loss for the quarter to $240.5 million, compared to $197.1 million in the same three months in 1999. The loss was smaller than expected after excluding one-time charges.

The company said its electronics Web store segment-U.S. books, music and DVD Video-has grown to 6 percent of sales, based upon a third-quarter pro forma operating profit of $24.7 million. This compares to a zero percent sales figure in the same quarter in 1999.

For the first time, the Electronics store has grown to become the second-largest U.S. store, behind Books and ahead of Music, Amazon.com said.

"The strong growth in electronics is due to great prices and deep selection, combined with our widely recognized customer service," said Amazon.com CEO Jeff Bezos. "In September, six of the 10 top-selling items on Amazon.com were from our electronics stores."

The company said its pro forma operating loss for the third quarter was $68.4 million, or 11 percent of sales, compared to a pro forma operating loss of $79.2 million, or 22 percent of sales, in third-quarter 1999. Pro forma net loss was $89.5 million for the period, compared to $85.8 million for the year-ago quarter.

Amazon.com expects sales to hit $950 million to $1.05 billion in the fourth quarter of 2000, with this figure jumping to about $4 billion in 2001.

Gross margin is expected to be seasonally down compared to the third quarter but up strongly compared to fourth-quarter 1999.

Pro forma operating losses are expected to be between 5 percent and 8 percent of sales, dropping to less than 5 percent of sales in 2001.