Amazon Loss Grows Even as Sales Rise

Amazon.com said Wednesday its third-quarter loss widened as it boosted spending to promote and add features to its Web site, but the loss was less than forecast and sales climbed beyond estimates.

However, the company forecast potentially deeper losses in the current quarter.

Amazon.com reported a loss of $85.8 million, or 26 cents a share, for its latest quarter, excluding $111.3 million in merger, acquisition, investment-related costs and stock-based compensation charges. A year ago the company lost $24.5 million, or 8 cents a share.

A loss of 28 cents was forecast by analysts polled by First Call Corp.

Including the acquisition costs, Amazon’s loss grew to $197.1 million, or 59 cents a share, versus $45.2 million, or 15 cents.

Sales more than doubled to $356 million from $154 million, topping the $346 million forecast of analysts polled by First Call. For the first nine months sales were $964 million, well above the $608 million tallied during all of last year.

The Seattle-based company said it had 13.1 million customers at the end of the quarter, nearly triple the year-earlier number.

Spending cut Amazon.com’s gross margin, which measures the profitability of sales after deducting basic Web site operating costs, to 19.8% of sales from 22.7% a year earlier. The margin will narrow an added 2 to 3 percentage points in the current quarter because of its product mix and gift certificates used to draw shoppers to its newest stores, said Chief Executive Jeffrey Bezos.

Bezos repeated his aim to boost spending to market Amazon.com’s Web site--especially for the upcoming holiday shopping season--and to add services and bulk up his distribution network.

But some analysts expressed frustration with current-quarter loss estimates, even though Bezos said the company’s U.S. books business is likely to be profitable this quarter. The company also now sells toys and electronics, among other products.

Amazon.com shares fell $5.31 to $75.94 on Nasdaq before results were announced, and slid to $72.75 in after-hours trading.

Meanwhile, another Seattle-based Net company--networking software firm F5 Networks--surprised Wall Street by reporting a profit of $2.3 million, or 11 cents a share in the latest quarter. It had been expected to lose 5 cents a share. Revenue surged to $13.8 million from $1.9 million.

The stock soared $37.78 to $137 on Nasdaq.

Bloomberg News and Associated Press were used in compiling this report.