Amazon Reports a Loss in Line With Expectations and Announces a 2-for-1 Split

Also, the DOT erases much of Tuesday's loss. MP3.com rockets in its debut, closing up 126%.
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SAN FRANCISCO -- Amazon.com (AMZN) - Get Report waited until around 5 p.m. EDT to report an earnings loss of 51 cents a share for its second quarter, exactly in line with the First Call estimate, along with a 2-for-1 split. That compares with a 12-cent loss in the second quarter of last year. Revenues were $314.4 million, roughly in line with expectations and nearly triple the year-ago revenue number of $116 million. In the first quarter Amazon had revenues of $293.6 million.

The company also said it expects to invest more heavily in the second half of the year than it has in the past, something that will not appeal to those shareholders looking for the retailing giant to start improving the bottom line sometime soon. But Amazon also said it approved its third split in 18 months, which should appease those same shareholders. Amazon closed up 5 1/4, or 4.4%, at 125 7/16.

CNBC

was reporting that Amazon.com was trading lower following the news.

Like a figure skater getting up after a fall, Internet stocks were able to compose themselves after Tuesday's drop and ended the day in fine fashion with a

Scott Hamilton

-like flip.

TheStreet.com Internet Sector

index finished up 21.58, or 3.6%, at 615.31, erasing much of Tuesday's 23-point loss. But with Tuesday's sharp slide still in their minds,

Federal Reserve

Chairman

Alan Greenspan

testifying on Thursday, and industry heavyweights

Amazon.com

(AMZN) - Get Report

and

America Online

(AOL)

set to report after the close today, traders were reluctant to extend themselves on the upside.

After the close, AOL reported earnings per share of 13 cents for its fiscal fourth quarter, two cents better than the First Call estimate of 11 cents, vs. 5 cents in the year-ago period. Revenue of $1.4 billion was 46% better than last year. The company said it gained 755,000 subscribers in the quarter, which was slightly below expectations of between 775,000 and 800,000 Operating margins were 16% vs. 9% a year ago. Ahead of its results, AOL closed up 2 11/16, or 2.4%, at 115 7/8.

Earlier in the day, AOL said it had entered into an agreement with

Ameritech

(AIT) - Get Report

to use Ameritech's phone lines to provide high-speed Internet service. AOL has similar deals with

Bell Atlantic

(BEL)

and

SBC Communications

(SBC)

.

Amazon closed up 5 5/16, or 4.4%, at 125 7/16, ahead of its earnings, due for release this afternoon.

IPOs were the other focus in the sector today, with online music distributor

MP3.com

(MPPP)

commanding much of the attention. By all accounts MP3.com was a rousing success, closing up 35 5/16, or 126%, at 63 5/16. But that's not the entire story. MP3.com was priced at 28, but opened at 92 and quickly ramped up to its session high of 105. Less than an hour and a half later, the stock was trading at 65 before falling to a session low of 58 1/2. Bottom line, a lot of people that got in soon after the stock opened are under water.

The other Net IPOs also closed well off their highs.

Hoover's

(HOOV)

, a provider of Internet business information, closed up 8, or 57%, at 22 after trading as high as 33. And

Voyager.net

(VOYN:Nasdaq), an Internet service provider in the Midwest, closed up only 1/16, or 0.4%, at 15 1/16 after trading as high as 20 1/2.

The sector got off to a strong start on the back of solid earnings reports from a number of Net companies after the close Tuesday, including

RealNetworks

(RNWK) - Get Report

, a maker of streaming software for playing audio and video over the Net. RealNetworks appealed to those investors looking to buy into an Internet company that has a shot at turning a profit soon. Earnings per share were flat for its second quarter, though

BancBoston Robertson Stephens

forecast the company will have earnings of 7 cents a share for fiscal year 1999. RealNetworks closed up 10 1/8, or 13%, at 87 15/16.