Online retailer Amazon.com reported a 33 percent increase in sales for the third-quarter of 2002, outpacing expectations but still not bringing the company to profitability.
The erstwhile bookseller and current CD, book, toy, electronics and housewares megastore reported revenue of US$851 million for the quarter ended Sept. 30, with a net loss of $35 million, or $0.09 a share. This compares to a net loss of $170 million, or $0.46 a share on revenue of $639 million for the third-quarter of last year.
A survey of analysts by Thomson Financial / First Call forecast a pro forma loss of $0.04 a share, with revenues of $809.5 million. Amazon.com beat that expectation with pro forma net income of $400,000, or break-even in per share terms, which compares to a pro forma net loss of $58 million, or loss of $0.16 a share in the third quarter of last year. The pro forma figures exclude non-operational, non-cash expenses and income as well as one-time charges.
The leading e-tailer landed in the red, despite recent partnerships with companies like Target Corp., Toys R Us Inc. and Office Depot Inc., but did manage to significantly narrow its losses thanks to rampant price cuts which it claims spurred sales.
The company's competitive pricing strategy also led it to lower the minimum order requirement on its free shipping offer to $25 from $49 during the quarter.
This was due, in part, to mounting competition from online rivals ready to lower their own price bars. Buy.com Inc., for example, offered earlier this year to undercut Amazon's book prices by 10 percent.
Still, the Seattle-based retailer's pricing strategy is expected to pay off in terms of profit in the near future, especially if it gets a boost from strong fourth-quarter holiday sales.
Shares in the company (AMZN) closed up 0.56 percent to $19.86 Thursday before the results were released.