Amazon.com (Nasdaq: AMZN) beat analyst estimates in the third quarter and said it expects losses to drop as a percentage of sales in the fourth quarter.
After market close Tuesday, the online retailer reported a third quarter pro forma operating loss of $68 million, or 25 cents per share, or about 11 percent of sales. First Call's survey of 29 analysts predicted a loss of 33 cents per share for the quarter ended Sept. 30.
"This was a great quarter for Amazon," CFO Warren Jenson said, during an afternoon conference call with analysts. "We saw solid growth while surpassing our key internal financial goals."
The company said it now sees a fourth quarter pro forma operating loss of 5 to 8 percent of sales, which are expected to range between $950 million and $1.05 billion.
Based on those projections and 353.9 million shares outstanding at the end of the third quarter, Amazon.com expects a fourth quarter loss between $47.5 million and $84 million, or 13 to 23 cents per share.
First Call consensus currently predicts a loss of 27 cents per share for Amazon.com's December quarter.
"We expect this will be our best holiday season ever," CEO Jeff Bezos said.
Amazon.com also predicted about $4 billion in revenue for 2001, with operating loss dropping below 5 percent of sales.
Cash and marketable securities should exceed $1 billion at the end of the fourth quarter, and $700 million at the end of 2001, the company said.
Including amortization and other special charges, Amazon.com in the third quarter lost $240.5 million, or 68 cents per share.
Third quarter revenue rose 79 percent year-over-year to $638 million. Gross margin increased to 26 percent.
Amazon.com's books, DVD and video businesses in the United States generated an operating profit of $25 million, or 6.2 percent of revenue from those units.
Electronics is now the company's second-largest U.S. store, behind books and ahead of music, executives said. Amazon.com's "early stage" businesses are currently on track to generate $600 million in annual revenue, CEO Bezos told analysts.
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