NEW YORK (CNN/Money) -
Amazon.com Tuesday reported a third-quarter profit that topped Wall Street forecasts on strong sales growth, but its shares slid in after-hours trading.
The world's biggest Internet retailer said it earned $48 million, or 11 cents a share, excluding certain items, compared with nil per share on the same basis a year earlier. Analysts had forecast a profit of 10 cents a share excluding items, according to First Call.
But Amazon (AMZN: Research, Estimates) stock fell 2.5 percent to $57.98 in after-hours trading, according to Instinet, after edging lower in regular trading on Nasdaq.
"Investors sold off on the good news," said Paul Keung, analyst with CIBC World Markets. "We saw a similar thing with eBay (EBAY: Research, Estimates) as well after it reported earnings. But there's very little in Amazon's report that would trigger long-term investors to sell the stock. There were no surprises and everything pretty much went according to plan."
Including amortization, stock-based compensation expenses, restructuring and other charges, the company had a net profit of $16 million, or 4 cents a share, compared with a net loss of $35 million, or 9 cents a share, for the same period a year ago. It was the first quarterly profit for the Seattle-based retailer outside of the holiday fourth quarter.
Sales grew to $1.13 billion, about in line with estimates, from $851 million a year ago. Amazon's international division showed the strongest results, with sales up 61 percent in the quarter from the same time a year ago.
"Thanks to free shipping and low prices, we expect more customers to turn to us for their holiday gifting needs this year -- producing our biggest holiday shopping season ever," Amazon CEO Jeff Bezos said in a statement.
The company said it expects sales of $1.76 billion to $1.91 billion for the fourth quarter -- when retailers typically earn the bulk of their money, and between $5.75 billion and $6.25 billion for the full year 2004. That compares with analysts' forecasts of $1.78 billion for the quarter and $6.1 billion forecast for the full year 2004, according to First Call.
Though Amazon did not give earnings-per-share guidance, it said it expects operating income of $110 million to $140 million for the fourth quarter and from $375 million to $475 million for next year, excluding restructuring charges.
Analysts expect Amazon to earn 27 cents a share in the fourth quarter, 57 cents a share for the full year 2003 and 88 cents a share for full year 2004.
"We've made conservative assumptions for 2004," Tom Szkutak, Amazon's chief financial officer, said in the company's earnings call. "We're cautiously optimistic because it's not possible to accurately predict demand." Among the concerns Szkutak highlighted were the economy, consumer spending and currency fluctuation.
Separately, in a Q&A with analysts, CEO Bezos said he disagreed with opinions that Amazon's highly popular free shipping incentive for orders over $25 may be running out of steam and that the company needs to look for other ways to push product and sales. "We have not realized the full impact of the free-shipping program yet, and we have many more years to go with it," Bezos said.
|
