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Amazon Posts 1st Net Profit, Sales Rise

1/28/2002 02:00:00 AM Eastern

Riding high on the dual triumphs of its first-ever billion-dollar quarter and first-ever net profit, e-tailer parlayed a strong holiday season into most positive end-of-year results.

Amazon posted a 15 percent increase in sales for the fourth quarter, reaching $1.12 billion, compared with $972.4 billion in the year-ago three months. At the same time, net profit was $5.1 million in the fourth quarter, including charges, compared with a loss of $545.1 million in the fourth quarter of 2000.

However, net sales in Amazon's Electronics, Tools and Kitchen segment — which includes sales of consumer electronics, computers, cellphones and cameras — dropped a bit in the fourth quarter ended Dec. 31, reaching $216.6 million, down from $220.2 million recorded in the year-ago period.

On the positive side in the CE segment, its pro forma operating loss declined by $52 million, or 72 percent, during the fourth quarter, coming in at a loss of $20.4 million, compared with a loss of $72.7 million in the same three months in 2000.

Amazon added a coat of gloss to its favorable quarter, announcing a new everyday economy shipping plan for online customers, where all orders over $99 will be shipped free. "There are two types of retailers: those that work hard to raise prices and those that work hard to lower prices," said Jeff Bezos, founder and CEO. "Though both models can be successful, we've decided to relentlessly follow the second model."

Amazon's books and music segment, its largest, which includes DVD and video products, saw net sales for the quarter climb to $538 million, compared with $511.7 million in the same quarter in 2000. Pro forma income from operations rose to $64 million, compared with $39 million in the year-ago three months.

For the year, net sales in the retailer's CE segment climbed to $547.2 million, compared with $484.2 million in the previous 12 months. The segment reduced its pro forma loss from operations to $140.7 million for the year, down from a loss of $269.9 million in the same 12 months in 2000.

Amazon expects overall company net sales will grow between 11 percent and 18 percent in the first quarter, ranging between $775 million and $825 million. Pro forma loss from operations is expected to be between break-even and $16 million, or between 0 percent and 2 percent of net sales.

For the full year in 2002, the retailer anticipates that net sales will grow by more than 10 percent, while pro forma income from operations is expected to be $30 million or more.

Amazon reported overall net sales of $3.1 billion for the 12 months, compared with $2.8 billion in 2000. The company reduced its net loss for the year to $567.3 million, down from a loss of $1.4 billion in the same 12 months in 2000.

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