Discounts Cut Amazon Losses Nearly in Half
Losses at Amazon.com Inc. were cut nearly in half in the second quarter as the online retailer cut prices and offered shipping discounts to lure new customers and boost sales.
The Seattle-based company said Tuesday that it lost $94 million, or 25 cents a share, down significantly from its loss of $168 million, or 47 cents a share, in the same period last year. Quarterly sales grew 21% to $805.6 million from $667.6 million in 2001.
Amazon Chief Executive Jeff Bezos also said Tuesday that the company would begin treating stock options as expenses by 2003. In the wake of recent accounting scandals, analysts have criticized companies--especially technology firms--for boosting financial results by disclosing stock options only as a footnote to corporate financial statements.
The accounting change probably will make it more difficult for Amazon to show quarterly profit--something it has done only once in its seven years of operation. But Bezos said it will enable Amazon “to do a much better job of aligning the interest of shareholders and employees.”
Excluding some expenses and stock-compensation costs, the company said its loss would have been $4.4 million, or 1 cent a share. That beat an estimated loss of 6 cents a share, according to analysts surveyed by Thomson First Call.
Chief Operating Officer Mark Peek said third-party transactions represented a strong area of growth, accounting for 35% of North American orders during the quarter.
Amazon collects fees from companies and individuals that sell new and used products on its site.
Amazon shares fell 95 cents to close at $14.55 on Nasdaq before its quarterly results were announced. It slipped to $13.72 in after-hours trading.
In other earnings Tuesday:
* Corning Inc., the world’s biggest maker of optical fiber and cable, said its second-quarter loss narrowed to $370 million, or 39 cents a share, from $4.76 billion, or $5.13, last year. Sales slipped 52% to $896 million from $1.87 billion as phone companies curtailed capital spending.
Corning said it expects to take a pretax restructuring charge of $125 million to $150 million in the current quarter. The New York-based company also said it will eliminate 400 jobs in addition to the 4,000 cuts already announced for this year.
* Flextronics International Ltd., the second-largest maker of electronics for companies such as Ericsson and Sun Microsystems Inc., said it had a first-quarter loss of $131.2 million, or 25 cents a share, compared with net income of $88.3 million, or 17 cents, a year earlier. Quarterly sales at the Singapore-based company rose slightly to $3.13 billion from $3.11 billion.
* Santa Monica-based video game maker Activision Inc. said first-quarter profit surged to $20.7 million, or 31 cents a share, from $29,000, or break-even, a year earlier. Sales climbed 73% to $191.3 million from $110.6 million.
* Online payment provider PayPal Inc. said its second-quarter profit grew to $529,000, or 1 cent per share, reversing a loss of $27.7 million, or $4.47 per share, for the same time last year. Revenue for the Mountain View, Calif., company totaled $53.8 million, nearly three times more than the $19.7 million generated in last year’s second quarter.
* XM Satellite Radio Holdings Inc. said its second-quarter loss widened to $117.2 million, or $1.38 a share, after payment of preferred dividends, from $38.5 million, or 76 cents a share, a year earlier. XM, the first satellite-radio broadcaster in the U.S., said quarterly sales were $3.84 million. A comparison to last year’s second quarter isn’t available because the company didn’t begin reporting sales until the third quarter.
XM said it needs to raise $275 million to be funded through next year.
SeeBeyond Technology Corp. said its net loss for the second quarter grew to $7.1 million, or 8 cents a share, up from $6.8 million, or 10 cents a share, last year. Sales at the Monrovia software maker dipped to $33.7 million from $51.7 million a year earlier.
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Times wire services were used in compiling this report.
