SAN FRANCISCO -- Two weeks into an especially jittery earnings season, few reports have been issued by e-commerce companies. But plenty of indications are out there already, and most point to the sanguine financial health for leaders such as

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In short, even though the first quarter of 1999 may not be as dazzling as the holiday-powered fourth quarter, the leaders of the e-commerce sector remain strong. "They may not beat

estimates by the same magnitude" as they did in the fourth quarter, says Chuck Taylor, a fund manager at

Amerindo Investment Advisors

, which holds both Amazon and eBay, "but they won't disappoint."

The e-commerce earnings reports also may take on even greater significance given the beating Internet stocks are taking, apparently as part of a rotation by money managers into cyclical stocks and out of tech stocks. Solid financial results could act as a salve for the e-commerce stocks, while disappointing results could act like a pile driver.

One place to find indicators for e-commerce earnings is in the results of the portals, which in their earnings reports have disclosed their Internet traffic. Traffic is as important an indicator for e-commerce companies as it is for portals, since more visitors means more ad dollars for portals, just as more visitors means more customers shopping on a site. In March



traffic jumped 41% from December levels to an average of 235 million page views per day, while



traffic rose 36% to 45 million in the same period and



grew 33%.

(Thanks to a decline in ad rates, Excite's revenue was flat with the previous quarter and Infoseek's slipped 2%. E-commerce companies such as Amazon and eBay that have resisted putting ads on their sites won't be hurt by that trend, while others such as




Cyberian Outpost




, which rely in part on ad revenue, are more vulnerable.)

Increased traffic doesn't guarantee increased revenue, but it's a sign that more people were visiting retailers' sites, says Sara Zeilstra, an analyst for

Warburg Dillon Read

who has a hold rating on Amazon, eBay, Onsale and

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. (Warburg Dillon Read has no underwriting relationship with any of these companies.)

Portals also reported strong growth in registered users, or regular visitors who fill out profiles for a personalized site. Yahoo!'s number of registered users jumped 34% to 47 million in the first quarter from the fourth quarter, while Infoseek's rose 50% to 12 million and Excite's grew 40% to 28 million.

E-commerce sites such as Amazon rely on registered users for features such as one-click shopping, which lets customers buy products without re-entering personal information with every purchase. Amazon said recently that it has 8 million customers, up nearly 30% from the end of 1998.

"You better have high growth" of at least 25% in page views and registered users, says Walter Price, portfolio manager of the

Dresdner RCM Global Technology

fund, which holds Yahoo, Amazon, eBay and

America Online


. "But at some point, traffic isn't enough." In addition to just viewing pages, Price says, customers better start putting their money where their mouse is.

So far, they seem to be doing just that. The early signs of online sales indicate "that the quarter as a whole is strong," says

Merrill Lynch's

Henry Blodget, who rates Yahoo!, Infoseek and Amazon hold. (Merrill Lynch has an underwriting relationship with Infoseek, but not with Yahoo! or Amazon.)

The first quarter is a slow one for traditional retailers because spending trails off after strong fourth-quarter holiday shopping. But even if fewer people visited shopping sites after the holidays ended, "a lot of people discovered e-commerce over the holidays," Zeilstra says. And those new customers likely drove commerce ahead in the first quarter.

To be sure, some quarterly results reported by e-commerce companies so far haven't been encouraging. Onsale, for instance, posted a first-quarter loss of $5.5 million, or 28 cents a share, compared with a year-earlier loss of $4.2 million, or 22 cents a share, and the

First Call

consensus estimate of a loss of 27 cents.

Of course, Onsale isn't seen as an e-commerce leader, and big players aren't expected to disappoint, says Merrill's Blodget. But second- and third-tier companies such as and

Preview Travel


may post bigger losses and revise their own estimates downward in coming quarters, says Zeilstra.

Just as important as the actual results is the strategy to maintain growth and expand the business, says Amerindo's Taylor. Amazon's key to growth lies in its new auction business and its "Shop the Web" service that lets customers search and buy just about anything. For eBay, it's how long the company can keep customers at its site. "This is not just about metrics," Taylor says.

It sure hasn't been about profits.