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Amazon Q3 CE Segment Sales Rise 6%

10/24/2001 09:53:00 AM Eastern

Seattle - Sales in the U.S. Electronics, Tools and Kitchen segment at Amazon.com climbed 6 percent in the third quarter, hitting $103.1 million, up from $97.6 million in the third quarter of 2000.

Gross profit in Amazon's U.S. Electronics segment, which includes sales of consumer electronics, computers, cameras and cellphones, climbed 49 percent in the third quarter ended Sept. 30, reaching $13.3 million, compared with $8.9 million in the year-ago three months. The segment had a $33.1 million pro forma loss from operations, cut nearly in half from the $60.8 million registered in the year-ago third quarter.

Amazon's largest product segment, U.S. Books, Music and DVD/Video, recorded sales of $351.4 million in the third quarter, a decrease of 12 percent from the $399.9 million registered in the same quarter in 2000. This segment includes DVD and video products.

Gross profit in the U.S. DVD/Video segment dropped 14 percent in the third quarter, hitting $93.4 million, down from $108.7 million in the same three months last year. Pro forma income from operations in the segment climbed to $26.2 million in the third quarter, up from $24.7 million in the year-ago three months.

Gross margin percentage in the U.S. Electronics segment improved 400 basis points in the third quarter, to 13 percent, from 9 percent in the year-ago period. Gross margin percentage for the DVD/Video segment remained at 27 percent in the third quarter, year over year. Amazon said overall company gross margin is expected to be between 22 percent and 25 percent of sales in the fourth quarter.

The Electronics segment as a percentage of Amazon's overall sales mix in the third quarter was 16 percent, an increase of 100 basis points from the 15 percent recorded in the third quarter of 2000. However, the DVD/Video segment as a percentage of the company's overall sales mix dropped 800 basis points to 55 percent in the third quarter, down from 63 percent in the same three months last year.

Overall sales at Amazon.com were somewhat flat in the third quarter, coming in at $639.3 million, compared with $637.8 million in the year-ago third quarter. The company expects sales to be flat to up 10 percent in the fourth quarter, compared with the same three months in 2000, hitting between $670 million and $1.07 billion.

The company, which hopes to reach a goal of pro forma operating profitability, excluding many costs, by this year's fourth quarter, recorded a pro forma loss from operations of $27 million in the third quarter, a 60 percent improvement over the $68 million year over year.

The pro forma net loss, including interest expense, improved 35 percent, reaching $58 million in the third quarter, compared with $89 million in the same three months last year.

For the nine months, sales in the U.S. Electronics, Tools and Kitchen segment jumped 25 percent to $330.6 million, compared with $263.9 million a year ago. Gross profit in the segment soared 96 percent in the third quarter, hitting $43.7 million, compared with $22.2 million in the same period in 2000. The segment reduced its pro forma loss from operations during the nine months to $120.3 million, compared with a loss of $197.2 million year over year.

In the U.S. Books, Music and DVD/Video segment for the nine months, sales dipped 3 percent to $1.19 billion, down from $1.15 billion in the same period in 2000. Gross profit for the segment in the nine months climbed 13 percent to $313.3 million, up from $278.5 million in the same nine months last year. The segment nearly tripled its pro forma income from operations during the nine months, reaching $92.8 million, compared with $32.3 million in the year-ago period.

Amazon's overall sales for the nine months were $2 billion, up from $1.79 billion in the same period last year. The company reported a pro forma net loss of $191.8 million for the nine months, down from the pro forma net loss of $326.7 million in the year-ago nine months.