Amazon's Surprise Statement Yields a Weak Sales Figure

In a surprise sneak peek at its fourth quarter results, e-tail giant Amazon.com (AMZN Quote) indicated Monday that its sales during the holiday period fell short of Wall Street's estimates.

Despite this, analysts were generally pleased with the preliminary data, as crucial inventory and profit-margin figures were positive.

The Seattle-based company said it expects to report fourth-quarter sales that exceed $960 million, within the range the company previously said it would report. But the number is less than the First Call/Thomson Financial consensus estimate of slightly more than $1 billion.

Amazon released the brief statement to comply with disclosure regulations a day before CEO Jeff Bezos is set to give a presentation at a Morgan Stanley Dean Witter investment conference.

Analysts were cautious in assessing the brief statement. "It's good news, but it's really hard to figure out," said Kristine Koerber, an analyst at W.R. Hambrecht. (Koerber rates Amazon a buy, and her firm as no underwriting relationship with the online retailer.)

Gross profit for the fourth quarter is expected to be over $210 million, an increase of 140% from the same period a year ago. Pro forma operating loss for the fourth quarter of 2000 is expected to be less than 7% of net sales, compared to a pro forma operating loss of 26% of net sales in the fourth quarter of 1999.

Amazon didn't mention what it expected to report on a per-share basis, but the Wall Street consensus is for the company to post a loss of 26 cents a share, compared with a loss of 55 cents per share a year earlier.

"All in all, they managed the ship pretty well during the fourth quarter," said Shawn Milne, an analyst at Wit Soundview. "My reaction is that there is no disaster here. But we do need to see more." (Wit hasn't done underwriting for Amazon.)

More than 35% of U.S. customers bought items other than books, music or videos, Bezos said in a statement. The company didn't disclose how much revenue it generated from electronics, kitchen supplies and tools.

The company expects to report an inventory balance for the year-end of $175 million, and will enter 2001 with $1.1 billion in cash and marketable securities.

In after-hours trading, Amazon lately was trading at $15.06 on Island, up slightly from its regular-trading close of $14.94.