Internet retailer Amazon.com today announced financial results for its second quarter, showing net sales up 26 percent and operating income more than doubling over the same quarter last year — but the figures were below Wall Street’s expectations.
At the same time, the Seattle-based company projected net sales in the current quarter to be 26 percent to 34 percent more than the same quarter last year.
The markets initially reacted to the news positively, bidding Amazon.com’s stock up 2.37 percent by the close of the NASDAQ, to 45.82. However, the stock plummeted in afterhours trading, losing as much as 5.3 percent by two hours after the markets closed.
Free Shipping To Continue
Net sales were US$1.39 billion in the second quarter, compared with $1.10 billion in second quarter 2003, an increase of 26 percent, the company reported. Net sales, excluding the $47 million benefit from changes in foreign exchange rates, grew 22 percent compared with second quarter 2003, according to the company report.
Operating income was reported to have more than doubled to $86 million in the second quarter, compared with $42 million in second quarter last year.
The company reported that net income was $76 million in the second quarter, or 18 cents per share, compared with a net loss of $43 million, or a loss of 11 cents per share, in second quarter 2003. Pro forma net income in the second quarter grew 77 percent to $75 million, or $0.18 per diluted share, compared with $42 million, or $0.10 per diluted share, in second quarter 2003.
In response to the performance report, Amazon.com founder and CEO Jeff Bezos vowed to continue the company’s recent policy offering free shipping for orders of $25 or more.
“Worldwide adoption of our everyday free shipping reached another record high point this quarter,” Bezos noted. “While free shipping is expensive for the company, it saves our customers tens of millions of dollars each quarter, and we plan to keep it in place indefinitely,” he said.
International Sales Up 50 Percent
The company reported operating cash flow was $410 million for the 12 months ending June 30, up $125 million from the $285 million for the 12 months ended June 30, 2003. Free cash flow grew 45 percent to $354 million for the 12-month period, up $100 million from the $245 million for the 12 months ended June 30, 2003, according to the report.
According to the report, North America segment sales, representing the Company’s U.S. and Canadian sites, grew 13 percent to $792 million, and segment operating income grew 21 percent to $66 million, compared with second quarter 2003.
International segment sales, representing the Company’s UK, German, French and Japanese sites, took off, growing 50 percent to $595 million, the report showed.
Net international sales, excluding the benefit from changes in foreign exchange rates, grew 38 percent compared with the second quarter in 2003. The international segment operating income grew to $35 million, compared with $13 million in second quarter 2003.