Amazon, N2K, CNet Post Losses; MindSpring Gains
Amazon.com Inc. said Wednesday that its second-quarter loss widened as the No. 1 online bookseller attracted more customers but spent heavily to do so amid intense competition from Barnes & Noble Inc. and other Internet rivals.
N2K Inc., which sells music over the Internet, also reported larger losses in the second quarter as revenue soared.
Online news service CNet Inc. posted a loss in the quarter as well, citing a slowdown in traffic growth on its Web site.
MindSpring Enterprises Inc., however, reported earnings that far exceeded estimates for the second quarter, marking the third straight profitable quarter for the fast-growing Internet-service provider.
All four companies reported their results after the close of trading.
Seattle-based Amazon.com said it lost $21.2 million, or 44 cents a share, in the period, compared with $6.7 million, or 16 cents, a year earlier.
Analysts expected a loss of 43 cents.
Sales more than quadrupled to $116 million from $27.9 million.
Expenses more than tripled to $43.2 million from $12.3 million.
Amazon’s costs are rising as it advertises its traditional book offerings and spends to promote new music-selling and overseas ventures. The company, like many Internet-based retailers, is betting that heavy marketing will pay off with increased sales that will push it toward profitability.
The company said that customer accounts increased by 880,000 to more than 3.14 million, an increase of more than fivefold.
Amazon rose $1.94 to close at $134 on the New York Stock Exchange.
N2K said its loss widened to $16.43 million, or $1.18 a share, from $5.65 million, or $1.90, a year ago. Revenue skyrocketed to $10 million from $1.82 million.
The New York-based company added 130,000 customers in the quarter for a total of about 352,000, an increase of 59%. Page views on its music channels jumped to 84.2 million from 80.2 million in the previous quarter and from 25.2 million from a year ago.
N2K’s stock fell 44 cents to close at $19.94 on Nasdaq.
MindSpring posted net income of $2 million, or 24 cents a diluted share, in the quarter, compared with a loss of $1.43 million, or 19 cents a share, a year ago. Revenue more than doubled to $25.1 million from $11.6 million.
The earnings beat analysts’ average forecast of 18 cents by 33%.
The Atlanta-based company also said the number of customers that it hooks up to the Internet swelled 15% to 393,000.
MindSpring shares soared $13.81, or 11%, to $140.31 on Nasdaq.
CNet, which recently formed an alliance with NBC Inc., said it lost 24 cents in the quarter. Analysts on average had expected a loss of 21 cents.
San Francisco-based CNet sold about 20% of its stake in the software company Vignette Corp., in the quarter, resulting in a gain of $4.5 million, or about 26 cents per share. Including the gain, CNet posted second-quarter net income of $254,000, or 2 cents per share. Revenue grew 58% to $13.1 million.
CNet, which provides online technology news, said it averaged 6.4 million page views per day during the second quarter, up 4% from the first quarter. By comparison, traffic during the first quarter rose by about 20% from the fourth quarter of 1997.
CNet shares closed up $2 at $64.13 on Nasdaq.
Bloomberg News and Reuters were used in compiling this report.