Amazon’s Loss Widens, but Analysts Had Expected Worse
Amazon.com Inc. said its loss widened in the third quarter, but much less than analysts had expected, as it poured more money into advertising and as its sales quadrupled.
The No. 1 online bookseller said it lost $24.7 million, or 49 cents a share, in the latest quarter, compared with a loss of $9.6 million, or 21 cents, a year ago. Analysts expected a loss of 57 cents a share, according to First Call Corp.
Sales climbed to $153.7 million from $37.9 million, beating analyst forecasts of $130 million. Marketing expenses surged to $37.5 million from $11.5 million a year earlier.
Amazon.com is spending heavily on advertising in a bid to lure millions of consumers who are shopping online for the first time. It’s coming under increasing competition from rivals such as Barnes & Noble Inc., whose online unit recently became a joint venture with Bertelsmann and is ramping up its marketing as it attempts to overtake Amazon.
The Seattle-based company gained 1.2 million customer accounts during the quarter, bringing its total to about 4.5 million.
Music sales were $14.4 million in the first full quarter of music retailing for Amazon, which opened its music store in June.
The earnings results were released after U.S. markets had closed. Shares of Amazon rose 75 cents to close at $117.06 on Nasdaq.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
INSURANCE
* Jefferson-Pilot Corp. said third-quarter earnings increased 21% to $9.2 million, or 85 cents a share, 3 cents higher than estimates, on higher sales of annuities. Earnings rose 9.8% in the individual life insurance business and grew 16% at its communications company.
OTHER INDUSTRIES
* Mobil Corp., the second-largest U.S. oil company, said its third-quarter earnings fell 45% to $497 million, or 61 cents a share, a penny higher than estimates, as revenue fell 17% to $13.6 billion. Like No. 1 Exxon Corp. and other oil companies that have reported profit declines for the quarter, Mobil was hurt by the lowest oil prices in 12 years and narrowing profit margins from refining. Results were also hurt by Mobil’s strong exposure to Asia.
* PhyCor Inc. said third-quarter profit fell 20% to $12 million, or 15 cents a share, in line with the physician practice manager’s warning last month that earnings would be hurt by lower-than-projected revenue from some recent purchases. The results matched analyst estimates. Revenue rose 44% to $408.5 million.
* Reader’s Digest Assn. Inc. posted better-than-expected profit of $2.5 million, or 2 cents a share, for its fiscal first quarter, after a loss of $4.6 million, or 5 cents, a year ago. The publisher also said it expects its full-year results to show “modest” improvement over 1998.
* Revlon Inc.’s profit plunged 83% in the third quarter to $5.6 million, or 10 cents a share. The cosmetics company had warned earlier this month that earnings would be hurt by weaker demand for its cosmetics in the U.S. and overseas. Analysts at that time reduced their estimates from 73 cents to 7 cents. Revenue fell 5.6% to $548.6 million.
* Starwood Hotels & Resorts, the world’s largest hotel owner, said third-quarter profit rose more than sixfold to $295 million, or $1.40 a share, in line with forecasts. Starwood also said cash flow at casinos jumped 48% in the quarter as it filled more hotel rooms and increased winnings at the casinos.
* Wm. Wrigley Jr. Co. said third-quarter net income rose 5.1% to $73.1 million, or 63 cents a share, lower than the 66 cents forecast, on weaker business in Russia. The chewing gum company’s revenue rose 2.5% to $494 million.
