Amazon Posts Narrower Loss,
Helped by 21% Increase in Sales

Amazon.com Inc. narrowed it quarterly loss as revenue rose 21%, ahead of Wall Street expectations.

The Seattle online retailer posted a second-quarter loss of $94 million, or 25 cents a share, compared with a loss of $168.4 million, or 47 cents a share, in the year-earlier period.

On a pro forma basis -- a nonstandard accounting method that excludes stock-based compensation, amortization of goodwill and other intangibles, restructuring charges and equity gains and losses -- the company had a loss of $4 million, or one cent a share, compared with a loss of $58 million, or 16 cents a share, a year earlier.

Revenue rose 21% to $806 million from $667.6 million last year.

Analysts surveyed by Thomson First Call were expecting Amazon to post a loss of six cents a share on revenue of $789 million.

The company said book unit sales grew 20% year over year, helped by price cuts and shipping discounts. Overall, though, the dollar sales in its books, music and DVD/video segment grew just 6% to $412 million.

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"I'm especially pleased with the outstanding job our U.S. Books team is doing," said Jeff Bezos, founder and chief executive, in prepared remarks.

Looking forward, the company said it sees revenue to be between $780 million and $830 million in the third quarter. For the year, sales are expected to grow by over 18%.

Wall Street was hoping for signs of solid revenue growth from Amazon, bolstered by strong sales of books, music and DVDs as well as continued gains at its non-U.S. Web sites. Though the cloud of the dot-com bust once threatened Amazon's viability, concerns about the company's survival have waned in recent months, especially after Amazon shocked Wall Street by reporting a profit on a GAAP basis and beating its own pro forma estimate for the fourth quarter of last year.

Nevertheless, the company reported a loss in the first quarter -- albeit much narrower from the year before -- and has yet to prove that it can regularly book profits.

Like other retailers, Amazon has had to deal with the hardships of a sluggish economy and heated competition from rivals eBay Inc. and Buy.com Inc., which manifests itself in bitter price wars and battles over dominance in an increasingly similar marketplace.

Updated July 23, 2002 5:32 p.m. EDT