Internet retail giant Amazon announced first quarter results yesterday that saw the company increase sales, but still lose money, albeit at a slower rate.
Net loss was US$10m, or US$0.03 per share, in the first quarter, compared with US$23m in the first quarter of 2002, or US$0.06 per share. Pro forma net income in the first quarter, which includes interest expense, grew over US$45m to US$40m, or US$0.10 per share, compared with a pro forma net loss of US$5m, or US$0.01 per share, in the first quarter of 2002.
“Our strategy of driving down costs to give customers lower prices continues to pay off,” said Tom Szkutak, chief financial officer of Amazon.com. “In the first quarter, customers took advantage of Free Super Saver Shipping and broad everyday low prices, which created our first-ever non-holiday quarter with sales over US$1bn, but this was only possible because we reduced our costs in virtually every area of our business.”
Third-party seller transactions (new, used and refurbished items sold on Amazon.com product detail pages by businesses and individuals) grew to 19pc of worldwide units in the first quarter, compared with 13pc of units a year ago.
North America segment sales grew 13pc to US$705m in the first quarter, unit growth was 28pc, and segment operating income grew 46pc to US$52m. International segment sales, representing the company’s UK, German, French and Japanese sites, grew 68pc to US$379m in the first quarter, unit growth was 52pc, and excluding the benefit from foreign exchange rates compared with the first quarter 2002, international segment sales grew 4pc. International segment operating income was US$16m, a US$27m improvement.
One of the oldest and largest internet retailers, Amazon is seen as the bellwether of internet stocks. Despite the company’s high profile and huge sales, it has consistently lost money since its foundation.
By Dick O’Brien