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Amazon Q4 CE Sales Soar 21%

1/24/2003 09:24:00 AM Eastern

Seattle - Consumer electronics sales made a strong move at Amazon.com in the online retailer's fourth quarter, climbing to $261.9 million in North America during the three months, a 21 percent increase over the year-ago period.

Making up the primary part of the hard goods mix in Amazon's Electronics, Tools and Kitchen segment, CE products helped this grouping improve upon a 2 percent decline recorded in the fourth quarter of 2001.

Looking at the big picture for Amazon.com, consolidated net income dropped 48 percent, to $3 million in the fourth quarter, down from a $5 million gain in the same three months a year ago. However, the $3 million did account for only the second quarter in which Amazon has been in the black; the first was last year's fourth quarter. Pro forma net income grew to $75 million in the three months, from $35 million the previous year.

The pro forma operating loss for the Electronics, Tools and Kitchen segment was more than cut in half during the fourth quarter, ended Dec. 31, dropping to $9.9 million, 52 percent better than the loss of $20.4 million in the same three months in 2001.

For the 12 months, North American sales of Amazon's CE segment increased 18 percent, hitting $645 million, up from $547.2 million in 2001. Pro forma operating loss for the segment reached $73.2 million, again about half the $140.7 million loss reported the previous year.

Amazon.com's largest segment, Books, Music and DVD/Video, enjoyed a 13 percent sales increase in the fourth quarter, reaching $606.1 million, up from $538 million year over year. Pro forma operating profit for the segment rose 14 percent, to $72.8 million in the fourth quarter, compared with a gain of $63.9 million in the same three months in 2001.

Running against the lackluster end-of-year sales tide registered its by sister brick and mortar business, consolidated Amazon fourth quarter sales jumped 28 percent, hitting $1.4 billion, up from $1.1 billion in the year-ago three months. The company attributed both growing holiday sales and its free shipping incentive for much of the increase.

'We're at a tipping point,' said Jeff Bezos, founder/CEO. 'Customers are now shopping at Amazon.com as much for our lower prices as for our selection and convenience.'

Consolidated operating income for the fourth quarter was $70.5 million, compared with $14.5 million in the same three months in 2001. Pro forma operating income for the period hit $102 million, a 74 percent gain over the $59 million reported the previous year.

For the 12 months, consolidated operating income reached $64 million, compared with a loss of $412 million in the previous year. Pro forma operating income for the 12 months hit $180 million, compared with a loss of $45 million year over year.

For the 12 months, Amazon's consolidated net loss dropped to $149 million, down from a loss of $567 million in 2001. Pro forma net income for the 12 months improved to $66 million, compared with a loss of $157 million in the previous year.

Looking ahead, Amazon expects first quarter 2003 sales to be between $1.03 billion and $1.08 billion, with growth between 21 percent and 27 percent. First quarter pro forma net profit is anticipated to be between $5 million and $20 million.

For all of 2003, sales are expected to grow over 15 percent, while pro forma net profit is anticipated to be over $115 million.

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