Amazon.com exceeds Q3 expectations

Net revenue was up by 33% from the same quarter in 2002

Amazon.com Inc. did better than expected during its third quarter, helped by strong sales across the six country-specific Web sites it operates.

Net revenue for the quarter, which ended Sept. 30, came in at $1.13 billion, and pro forma earnings per share were 11 cents on pro forma net income of $48 million, the company reported yesterday. That topped consensus expectations from analysts polled by Thomson Financial/First Call of $1.12 billion in net revenue and 10 cents in pro forma earnings per share.

Compared with 2002's third quarter, net revenue grew 33%. The company reported break-even pro forma earnings per share and net income in 2002's third quarter.

"This was another great quarter for Amazon.com, driven by our customers' taking advantage of our lower prices, free shipping and expanded selection," said Tom Szkutak, Amazon.com's chief financial officer, during a conference call after the company reported its quarterly results.

The pro forma results exclude items such as stock-based compensation, amortization of intangibles and restructuring-related charges. Actual earnings per share according to Generally Accepted Accounting Principles (GAAP) were 4 cents on net income of $16 million, compared with a GAAP net loss of 9 cents per share, or $35 million, in 2002's third quarter.

Compared with the same quarter a year earlier, sales from Amazon.com's U.S. and Canadian sites grew a combined 21% to $709 million, while sales from the company's U.K., German, French and Japanese sites grew a combined 61% to $425 million.

Each of the six sites offers content of specific interest to the country's residents and free shipping options domestically, but anyone anywhere in the world can buy from the sites.

Looking ahead, Amazon.com expects its fourth-quarter net revenue to be between $1.76 billion and $1.91 billion, which would be a growth of 23% to 34%, compared with 2002's fourth quarter. Operating income is expected to be between $110 million and $140 million.

For the full year, Amazon.com expects net revenue to be between $5.75 billion and $6.25 billion and operating income to be between $315 million and $415 million.

Copyright © 2003 IDG Communications, Inc.

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