AMAZON REPORTS QUARTERLY LOSS
For Bellwether Internet Retailer
The Seattle-based company reported that it recorded a second quarter pro forma net loss of $115.7 million, or 33 cents a share, up from a loss of $82.7 million, or 26 cents a share in the same period last year. Wall Street analysts had expected Amazon to lose 35 cents a share.
There is a lot of pressure on Amazon to perform, as many in the industry see the company as a bellwether for the entire online retailing sector.
"It's time for these guys to start performing like real retailers," said analyst Gene Alvarez of the research firm the Meta Group. "The Internet panache has worn off and now it's time to start performing."
Amazon stock has fallen from its 52-week high of 113 set in December to stand now just above its year-low of 32 7/16 set in June.
In early trading on Thursday (7/27), Amazon stock fell 13%, down $4.625 to $31.438.
The quarterly revenues were up 84% from the same period last year, rising to $578 million from $314 million. But that rise was only slightly up from the $574 million in revenues for the previous quarter. The 84% rise was smaller than Amazon was hoping for, but Chief Executive Jeff Bezos put a positive spin on it.
"It would be very unrealistic of us as a management team to believe that we could predict our growth to within 10%," Bezos said. "We expected 90%; we got 84%. I consider that to be a winning prediction."
Amazon stock took a beating last month after one analyst cast doubt on the company's creditworthiness and cash position, a verdict the company dismissed as "hogwash." Amazon ended the second quarter with $908million in cash and cash equivalents (that means candy and "Star Wars" collectibles). The company is expected to finish the year with $1 billion in cash.
While many analysts painted the dot-com in various shades of red, J.P. Morgan analyst Tom Wyman saw things differently. "I don't see anything here that falls under the heading of bad news," Wyman said. "They came in right where they should, and while there's still a long way to go, this is pretty positive."
In other Amazon losses, the company lost president and CEO Joseph Galli to VerticalNet Inc. on Tuesday (7/25). Galli will be CEO of the Pennsylvania-based company.
