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Amazon 2Q loss widens
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July 21, 1999: 7:34 p.m. ET
Internet retailer posts loss of 51 cents a share, matching forecasts
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NEW YORK (CNNfn) - E-commerce retailer Amazon.com Inc. Wednesday reported a loss from operations of $82.8 million in the second quarter, matching analysts' expectations, as the online retailer continued to spend more than it makes to expand its online sales base.
The Seattle-based company also announced a two-for-one stock split, the third split in its three-year-old publicly traded life.
Amazon (AMZN) posted a pro-forma loss from operations of 51 cents a diluted share for the quarter ended June 30, compared with $17 million, or 12 cents a share in the year-earlier period, in line with what analysts polled by First Call Corp. had expected. Revenue almost tripled to $314.4 million.
Speaking on a conference call, Amazon founder and chief executive Jeff Bezos praised the company's dramatic increase in customer base - the company has counted 4.5 million new customers this year - and told analysts and investors that the e-tailer remains committed to tapping into the global retail market.
"We believe there's a tremendous opportunity ahead across the $5 trillion retail market globally," Jeff Bezos, founder and chief executive of the company, told analysts and investors.
Spending on the rise
Amazon spent heavily during the quarter promoting its Web site, investing in other companies, boosting its distribution capacity and adding new products such as toys, auctions and electronics to its roster of sellable goods.
Included in the quarterly figures was $55.2 million of merger and acquisition related costs, as well as stock compensation charges, the company said. That, along with interest expenses and other items brought the company's final loss for the quarter to $138 million, or 86 cents a share.
"We did a lot this quarter," Bezos said. "For the rest of 1999 we expect to invest more heavily than we have in the past."
And indeed it did. Between April and June, Amazon.com bought a number of Internet companies to expand its selection of products and services, including LiveBid.com, Accept.com Financial Services Corp., Alexa Internet and e-Niche Inc., which does business on the Web as Exchange.com. It also invested in a number of other companies, including HomeGrocer.com
and auction house Sotheby's Holdings Inc.
Last week, it added toys and electronics to its offerings of books, music, videos, greeting cards, gifts and auctions.
The company also spent money expanding its distribution centers during the quarter, and announced plans to build new centers in Kentucky and Georgia. It also plans to build new distribution centers in the U.K.
It appears to be paying off. About 11.2 million shoppers visited Amazon.com at least once
during June, according to Media Metrix, a service that tracks Internet traffic, and was the No. 1 online shopping site and the No. 8 website in the U.S..
Another stock split
For the first six months, Amazon posted a net loss of $199.7 million, or $1.26 a share, compared with a loss of $32.9 million, or 23 cents a year earlier. Excluding acquisition costs and other expenses, the company recorded a pro-forma loss of $119.1 million, or 75 cents a share compared to $27.1 million, or 19 cents in the year-earlier period.
Amazon's one-year share price
The company's board of directors also announced a two-for-one stock split. Shareholders will receive one additional share for each share held on the record date of Aug. 12, 1999. The split will take effect Sept. 1, 1999.
Amazon shares rose 5-5/16, or almost 5 percent, to 125-7/16 on the Nasdaq stock exchange ahead of its earnings announcement. The company went public on May 15, 1997 at an initial offering price of 3. It split its stock three-for-one on Jan. 4, 1999.
Separately, the company appointed Joseph Galli to the board of directors. Galli, a 19-year veteran of Black & Decker, joined Amazon in June. 
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