Amazon surprises with smaller loss, sales up 80 pc

The surprisingly strong performance came after months of increasing frustration among analysts that there seemed to be no end in sight to the company’s losses. "It was a great quarter in a bunch of different aspects of our business. There was no single area where we made improvements that accounted for that (smaller loss)," Amazon chief executive Jeff Bezos told reporters in a conference call.

The company posted a wider net loss of $240.5 million, or 68 cents a share, vs a year-ago net loss of $197.1 million, or 59 cents a share. For the crucial fourth quarter, the strongest for most retailers because of holiday season buying, Amazon.com said it expected sales of $950 million to $1.05 billion. That is on target with with analysts’ average expectations for fourth-quarter sales of about $1 billion, according to First Call/Thomson Financial.

Amazon said fourth-quarter pro forma operating losses were expected to be between 5 per cent and 8 per cent of sales, which based on the sales estimates would work out to $47.5 million to $84 million. It said that its fourth-quarter gross margin was expected to be down seasonally compared to the third quarter of this year, but up strongly over the fourth quarter of 1999.

The company said its year-end cash and marketable securities were expected to be more than $1 billion. For 2001, Amazon said it expected sales to be about $4billion, and said it pro forma loss from operations was expected to narrow to less than 5 percent of sales, which would be about $200 million based on the sales estimate, and perhaps substantially less than that.

Compaq beats expectation: Compaq Computer Corp reported that its third-quarter profit jumped sharply on strong sales throughout its product lines, and said it sees strong growth going into the fourth quarter.

The better-than-expected results, following a series of disappointments from its rivals, signalled a turnaround for the world’s number one personal computer maker, which a year ago was showing stagnant revenue growth, analysts said.

"The primary product groups all showed growth," said Banc of America Montgomery analyst Kurt King. "This is indeed a new Compaq." Overall, Compaq chairman and chief executive Michael Capellas said he was confident on the fourth quarter and next year.

"Looking forward, we expect continued strong revenue growth," he said in a statement. "We are confident that we can achieve 18 per cent revenue growth and strong earnings per share improvement in the fourth quarter."

"In 2001, we see earnings growth in excess of 40 per cent, consistent with consensus estimates," he said. The Houston-based company reported third-quarter net income of $550 million, or 31 cents per share, including a net investment gain of $25 million, compared with $140 million, or 8 cents, in the third quarter a year ago.

Excluding the investment gain, Compaq earned 30 cents per share, beating the Wall Street estimate of 29 cents, as reported by First Call/Thomson Financial, which compiles brokerage estimates. Sales rose 22 per cent to $11.2 billion. Analysts expected sales of $10.76 billion, according to First Call. Sales of its industry standard servers, which are used to manage computer networks, as well as business data storage and consumer sales all showed strong gains, Compaq said.