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Amazon loss beats Street
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January 26, 1999: 6:57 p.m. ET
e-commerce leader extends 4Q losses, but sales increase 283%
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NEW YORK (CNNfn) - Online bookseller Amazon.com Inc., a leader in electronic commerce and one of the hottest Internet stocks, reported a narrower-than-expected fourth-quarter loss as holiday sales helped boost revenue 283 percent.
The Seattle-based company posted a pro-forma net loss, excluding charges, of $22.2 million, or 14 cents a share. Analysts polled by First Call called for Amazon (AMZN) to report a loss of 18 cents per share.
Amazon received a boost from holiday sales, reporting fourth-quarter sales of $252.9 million, compared with last-year's sales of $66 million. Like many e-commerce companies, Amazon benefited from growing user awareness and acceptance of shopping online.
Despite its strong sales, the company has become a poster child of sorts for unprofitable Internet companies with high stock valuations. Though some analysts have expressed optimism that the days of red ink will soon be over for Amazon, company officials have yet to predict when that day will come.
Indeed, the company extended its losses from last-year's fourth quarter, when it reported a loss of $10.8 million, or 8 cents a share.
Competition heating up
While both its revenue and losses continue to grow, Amazon will face more intense competition both in the United States and Europe in 1999. In October, German media giant Bertlesmann AG took a 50-percent stake in barnesandnoble.com, Amazon's fiercest rival.
While Amazon boosted its European presence with the launch of online stores in England and Germany, Bertlesmann is set to launch its own European online bookstore.
Meanwhile, Barnes & Noble Inc. (BKS) agreed to acquire Ingram Book Group, which is Amazon's largest book supplier.
Furthermore, Amazon now faces online competition from established retail outlets Borders Group Inc. (BGP) and Books-A-Million Inc. (BAMM).
"Competition will accelerate in 1999," said Jeff Bezos, Amazon founder and chief executive officer. "We still believe it is impossible to keep the pronounced bookselling market share lead over the long term."
But Bezos pointed out the company will continue to expand through investments and by opening more distribution centers.
"Amazon.com is still a small and young company relative to many offline retailers, and we must ensure that we build the strongest customer relationships possible during this critical period," Bezos said. "In 1999, we expect to invest even more aggressively than we have in the past."
During the quarter, Amazon launched videotape and consumer merchandise stores on its site, selling movies and toys alongside its book and music offerings.
Earlier this month, the company announced plans to open a 322,560-square-foot distribution facility in Fernley, Nev.
This year's fourth-quarter results exclude $24.2 million in merger-and-acquisition-related costs. Including those charges, Amazon posted a loss of $46.4 million, or 30 cents a share.
For the full fiscal year 1998, Amazon reported a pro-forma loss of $74.4 million, or 50 cents a share, on $609 million in sales, compared with 1997 losses of $31 million, or 24 cents a share, on $147.8 million in sales.
Amazon shares rose 2-23/32 to close at 115-3/32 in Tuesday trade before surging to 121 in after-hours trading. 
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