Amazon Sees Taxes Hitting 2005 Profit

Amazon.com(AMZN Quote) said in a public filing that it expects 2005 net income to decline from the $588 million profit it posted in 2004 because of a tax provision.

"We expect net income for 2005 to decline because we expect a tax provision in 2005 rather than the large tax benefit we received in 2004," Amazon wrote in a 10-K statement filed on Friday. Amazon recorded a primarily noncash benefit last year of about $233 million, related mostly to valuing deferred tax assets.

"We expect our cash taxes paid in 2005 to be approximately $25 million, compared with $4 million in 2004 and $2 million in 2003," the company said.

A Thomson First Call survey was expecting Amazon to post a profit of $451.5 million in 2005.

Analysts were predicting the company would earn $1.05 a share before items this year, above the 97 cents a share the company posted a year earlier.

Shares of Amazon were recently off 23 cents to $34.68.