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Amazon posts 1Q loss
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April 28, 1999: 6:14 p.m. ET
E-commerce giant's shortfall is narrower than Wall Street forecasts
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NEW YORK (CNNfn) - Internet-retailing giant Amazon.com Inc. Wednesday reported a smaller-than-expected first-quarter operating loss of $36.4 million as revenues surged 236 percent.
The Seattle-based company posted a pro-forma net loss of 23 cents per share on sales of $293.6 million. Analysts polled by First Call expected Amazon (AMZN) to lose 29 cents per share in the quarter.
Those results exclude merger- and acquisition-related charges of $25.3 million. Including those items, Amazon reported a net loss of $61.7 million, or 39 cents per share.
Amazon shares fell 13 to close at 192-7/8 in Nasdaq trading exchange prior to the announcement. Its stock then fell to 185-7/8 in after-hours trading on the Instinet trading system after the announcement.
 Amazon's stock since going public in 1997
Scott Ehrens, an analyst at Bear Stearns, told CNNfn Amazon shares fell after hours because the company failed to meet higher "whisper number" revenue figures. Nonetheless, Ehrens said Amazon's first-quarter performance is a sign that the company is on the right track.
Repeat customers
Amazon has rapidly moved beyond its core bookselling business to offer music, videos, gifts and auctions. Along with its new offerings, the company added 2.2 million new customers during the quarter, bringing its total to 8.4 million.
Amazon's revenues exceeded the $252.9 million in sales it reported during the seasonally strong fourth quarter. Repeat customer orders represented 66 percent of orders made in the quarter.
Ehrens said that figure was particularly impressive because it demonstrated Amazon's ability to retain a significant portion of the customers it gained during the holiday shopping season.
"Clearly, a lot of [customers] came back in the first quarter, which is typically a weak quarter," Ehrens said.
Forget about profits
As Amazon has expanded into such disparate areas, however, the company's losses have widened. Analysts, however, continue to react favorably to the company's expansion efforts.
"Right now, the name of the game is market-share gains," Ehrens said. "I'm not looking for Amazon to post a bottom-line profit anytime soon."
Jeff Bezos, Amazon founder and chief executive, said the company will continue to expand during the coming quarters.
"We will continue to invest in systems, people and product expansion, each of which helps us better serve customers," Bezos said. "For the rest of 1999, we expect to invest more heavily than we have in the past."
Bezos also said the company is currently conducting a search for a chief operating officer, as well as a new chief financial officer. Current CFO Joy Covey is taking on a new role as chief strategy officer.
In last year's first quarter, Amazon reported a loss of $10.4 million, or 7 cents per share, on $87.3 million in revenue.
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