NEW YORK (CNNfn) - After watching several of its brick-and-mortar counterparts warn investors of weaker-than-expected sales and earnings, Internet retailing leader Amazon.com said Monday its fourth-quarter revenue and profit will be in line with its previous forecasts.|
Initially, the news, which was released after the closing bell, set of a flurry of buying which sent Amazon (AMZN: Research, Estimates) shares soaring more than 15 percent in after-hours trade. However, they quickly fell back, settling at about $15, six cents above their Nasdaq close.
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Amazon said it expects to report fourth-quarter sales exceeding $960 million, which is at least 40 percent more than it reported in the same period a year earlier.
While that is below the $1 billion revenue target some Wall Street analysts had expected the company to report for the quarter ended Dec. 31, it is within the $950 million to $1.05 billion range Amazon executives told them to expect when they reported the company's third-quarter results in October.
At the same time, Amazon said it expects to report a pro forma operating loss that is less than 7 percent of sales, which also is within its earlier guidance of a loss between 5 percent and 8 percent of sales.
Amazon did not provide a per-share loss estimate, but most analysts are expecting the company to lose 26 cents per share during the quarter, according to a survey conducted by earnings tracker First Call.
Amazon said it expects its fourth-quarter gross profit to be over $210 million, an increase of more than 140 percent over its gross profit during the same period last year.
The fourth-quarter results are scheduled for release on Jan. 25.
In an interview on CNNfn's Moneyline News Hour Monday, Jeff Bezos, Amazon's chief executive, said the company in the most recent quarter was able to manage its inventory much better that it had in the past, which enabled it to save a significant amount of money.
"In Q4 of '99, we did a great job of delivering for customers, but it was very costly for us," Bezos said. "In Q4 of 2000, we did an even better job of delivering for customers, but at a much, much lower cost."
Warren Jenson, Amazon's chief financial officer, said Amazon expects to report an inventory balance for year-end of less than $175 million. That's a 20 percent decrease from the company's end-of-year balance in 1999, Jenson said.
The Seattle-based company's announcement stands in stark contrast to traditional retailers. Most of them have reported disappointing holiday sales and several – including Federated Department Stores, parent of Bloomingdale's and Macy's – have warned that their fourth-quarter financial results will fall below previous expectations.
However, Amazon was not the only firm to reiterate its quarterly financial expectations in what has turned out to be a disappointing period for companies in a range of industries. Several others, including PepsiCo and Verizon, issued similar statements earlier in the day.
"We're very pleased with 40 percent growth," Bezos said, noting that last year's fourth quarter was one of the strongest in terms of consumer demand in years while the most recent was one of the weakest, making for a difficult comparison. (98K WAV) or (98K AIFF)
During the quarter, more than 35 percent of Amazon's U.S. customers bought products other than books, music or DVD and videos, Bezos said.
The company has been criticized by some analysts who have questioned its strategy of branching too far beyond its original business of selling books, music and video into product areas including hardware, electronics and toys.
As have most Internet stocks, Amazon shares have dropped sharply over the past year. At Monday's close, they stood more than 83.6 percent below their 12-month high of $91.50.
Bezos said that Amazon's preliminary fourth-quarter results should restore investors' confidence in the company.
"We're in a marketplace where the only thing that's going to help is to show results, and that's what we have done," he said. "A year ago, we said we would have our operating loss as a single-digit percentage of sales, and we have done that. So I think we have done a good job at delivering the things that we said we would try to deliver on."