Investors hotfooted it into

Amazon.com

(AMZN) - Get Amazon.com, Inc. Report

stock after the company

surprised Wall Street with a strong earnings forecast Monday. But analysts who cover the stock are waiting for the other shoe to drop.

Amazon shares rocketed 32% Monday on news that strong sales of consumer electronics goods would lead to a narrower-than-expected first-quarter loss on stronger-than-forecast sales. But at least two analysts who cover the Seattle-based online retailer noted that margins on electronics goods tend to be lower than those on other goods Amazon sells -- so even a strong rise in electronics sales wouldn't tend to sharply reduce losses.

What, then, is responsible for Amazon's sudden rise in gross margins? The press release didn't specify, and the company didn't immediately return a call seeking comment. But given Amazon's tendency to push its spin on things, these analysts say they'll remain skeptical until they get more information.

Plugged In

Amazon flagged consumer electronics sales as the engine of its growth in the quarter. Revenue should exceed $695 million for the quarter, about 4% above the Wall Street consensus estimate of $669.6 million, according to

Thomson Financial/First Call

. The company expects to lose 22 cents a share, substantially below the expected 30-cent loss. Shares surged on the news, lately up $2.66, or nearly 32%, to $11.03.

But even a strong jump in electronics sales doesn't explain the improving profit picture, say analysts, because electronics gear typically carries lower margins. The company's gross margins for the quarter will be around 25%, compared with expectations in the low 20s, says Steve Weinstein, an analyst at

Pacific Crest Securities

. Margins on electronics sales, he says, are typically in the teens.

"So if growth was in electronics, I would have expected it to drag it down," he says. "Which makes me wonder if some more revenues are coming in from somewhere." Weinstein suggested the most likely scenario is that a chunk of revenue came in from one of the company's partners in the so-called Amazon Commerce Network, a group of revenue-sharing joint ventures Amazon has formed. (Weinstein has a market perform rating on Amazon, and his firm does not have a banking relationship with the company.)

The announcement was surprising to most analysts, as

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many signs had pointed to a possible shortfall in quarterly earnings. Not only has the slowing economy taken a dent out of sales at bricks-and-mortar retailers, but surveys have also shown that online retailing has slowed, especially in Amazon's core books, video and music business. Meanwhile, a recent study by the

National Retail Federation

showed substantial growth in online sales of consumer electronics, a slice of data confirmed by Amazon's announcement.

However, until more detailed information becomes available when the company releases quarterly earnings April 24, most analysts are not adjusting their ratings.

Marginalized

Mark Rowen, an analyst at

Prudential Securities

who in a recent report suggested Amazon could fall short of estimates, is keeping his sell rating on the stock. His top concern is margins on electronics sales. (Prudential has had a banking relationship with Amazon.)

"Absent financial details on the segment, we remain concerned that this is a negative-contribution margin category, and therefore will lose more and more money as it grows," he wrote in a report Monday.

And while the company reiterated its plans to become profitable on a limited basis by the fourth quarter of 2001, Monday's announcement did little to quell concerns over the long-term health of the company's balance sheet.

In recent months, the issue of whether the company can pay its bills as it drives towards profitability has polarized Wall Street. Often, the debate has been colorful, pitting the views of former

Lehman Brothers

debt analyst Ravi Suria, who predicts a credit crunch by the second half, with more bullish analysts who believe the company has plenty of cash to stay in business.

"We still have concerns over the long-term profitability of the company," says Kristine Koerber, an analyst at

W.R. Hambrecht

. (Koerber has a neutral rating on the stock, and her firm doesn't have a banking relationship with Amazon.)

While investors certainly loved Monday's news, those on the sidelines would be well advised to wait for more details.