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Amazon's North American CE Sales Rise 22%

1/28/2004 10:13:00 AM Eastern

Seattle — Online holiday purchases charged full-speed ahead in the fourth quarter, with Amazon.com in the forefront of growing success for at-home shopping retailers.

Sales in Amazon’s consumer electronics segment in North America jumped 22 percent in the three months, hitting $352.5 million, up from $289.8 million in the year-ago period.

Fourth-quarter sales in the North American media segment, which includes DVD/video and video games and game consoles, climbed 16 percent, reaching $750.9 million, compared with $648.6 million year-on-year.

Overall sales in North America grew 18 percent in the fourth quarter, ended Dec. 31, to $1.1 billion, from $966.7 million in the same period in 2002.

Gross profit in North America swung upward 19 percent in the three-month holiday period, hitting $289 million, from $243 million in the fourth quarter a year earlier. Operating income for the three months grew 39 percent, to $114 million, compared with $82 million in the same three months in 2002. Fourth quarter profit margin remained at 25 percent year-over-year.

For the 12 months, North American consumer electronics segment sales at Amazon soared 29 percent, to $878.5 million, compared with $681 million the previous year. Media segment sales rose 14 percent for the 12 months in North America, reaching $2.3 billion, up from $2 billion the previous year.

The combination of free-shipping and healthy discounting helped the Internet retailer report improved consolidated fourth quarter and yearly sales, with Amazon recording its first annual profit.

Amazon enjoyed a 36 percent increase in consolidated fourth quarter sales, rising to $1.9 billion, from $1.4 billion in the same three months a year ago. Sales benefited by $98 million from changes in foreign exchange rates quarter over quarter. Without the benefit, sales would have increased 29 percent.

Consolidated operating income about doubled for the period, hitting $137.6 million in the fourth quarter, compared with $70.5 million in the same quarter last year.

Net income reached $73.2 million, a big jump over the $2.7 million recorded year-on-year. Pro forma net income grew 66 percent in the fourth quarter, to $125 million, up from $75.4 million in the same three months a year ago.

'Our commitment to year-round free shipping and lower prices continues to be a winner for our customers and Amazon.com,' said Jeff Bezos, founder/CEO.

For the 12 months, consolidated sales increased 34 percent, to $5.3 billion, up from $3.9 billion in 2002. Sales benefited by $232 million from changes in foreign exchange.

For the year, Amazon moved into the black — its first annual profit — with net income of $35.3 million, compared with a net loss of $149.1 million in 2002. Pro forma net income improved to $256 million for the 12 months, up from $66.5 million year-over-year.

Amazon anticipates first-quarter sales of between $1.4 billion and $1.5 billion, or growth of between 28 percent and 38 percent, compared with the first three months in 2003. For the upcoming 12 months, it expects sales of between $6.2 billion and $6.7 billion.

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