Shares of Amazon.com fell nearly 8 percent this morning
after the e-commerce giant yesterday reported that first-quarter losses
widened by more than 200 percent while still beating analyst expectations.
Amazon stock slumped $4.13, or 7.71 percent, to $49.38, with almost 1
million shares changing hands shortly after the opening bell.
The company yesterday reported that pro forma net losses for the period,
excluding investment and other charges, were $121 million, or 35 cents per
share, on revenues of $574 million. That compares with a pro forma net loss
of $36 million, or 12 cents per share, on revenues of $294 million in the
same period in 1999.
Analysts expected Amazon to lose 36 cents per share, according to a survey
by First Call.
The quarter marked the first time that Amazon's revenue declined from
quarter to quarter sequentially. In the fourth quarter of last year,
Amazon posted $675 million in revenue.
But the first quarter marked an improvement in other aspects compared with the
company's performance in the fourth quarter. The company's gross profit
margins, for instance, improved from 13 percent in the fourth quarter to 22
percent in the first quarter.
A company's profit margin is the difference between what a company charges
for its goods and services and what those goods and services cost the
company. In the year-ago quarter, Amazon's profit margins also stood at 22
Following up on last quarter when Amazon broke out its revenues for its
books business, the company further detailed its different
operations. During the quarter, Amazon lost $2.4 million on its books, music
and video businesses on sales of $401.4 million. On its other
non-international businesses--including its toys, electronics and home
improvement stores--the company lost $69.4 million on sales of $97.3
Meanwhile, the company lost $27.4 million on $75.1 million in sales with its
For the second quarter in a row, the Seattle-based company said its books business was profitable but declined to give the bottom line
number for that particular business.