Amazon Hits Profitability in Q4

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Amazon.com achieved two milestones in the fourth quarter of 2001: It recorded its first quarter of $1 billion in sales, and it reached profitability.


Amazon.com said that its net sales for the fourth quarter ended Dec. 31 rose 15 percent to $1.1 billion, from $972 million a year earlier. Net sales were $3.1 billion for the full year 2001, up from $2.7 billion in 2000. Net income in the fourth quarter was just over $5 million, or 1 cent per share, up from a loss of $545.1 million, or $1.53 per share, a year ago. For 2001, Amazon.com reported a net loss of $567.3 million, or $1.56 per share, compared with a loss of $1.4 billion, or $4.02 per share, in 2000.


The company has claimed it's been profitable for some time, citing its pro forma earnings. However, critics say that pro forma earnings are not an accurate measure of a company's earnings because they exclude certain non-cash charges and one-time costs. The fourth quarter earnings were calculated under generally accepted accounting principles, or GAAP, which are considered more accurate.


Amazon.com reported net sales of Books, Music and Video/DVDs of just over $538 million in the fourth quarter, up from $511.7 million a year earlier. For the full year 2001, net sales in the category were $1.6 billion, down slightly from $1.7 billion. Its Electronics, Tools and Kitchen net sales fell slightly in the quarter to $216.6 million, from $220.2 million. For 2001, net sales in the segment rose to $547.2 million, from $484.1 million a year earlier.


International segment sales in the company's UK, Germany, France and Japan sites grew 81 percent for 2001, Amazon.com said. Including sales from its U.S. site, more than 29 percent of its sales were to international customers last year.


The company had $1.2 billion in cash and equivalents at the end of 2001, down from $1.4 billion a year earlier.


For the first quarter of 2002, Amazon.com expects net sales of $775 million to $825 million. It expects net sales to grow at least 10 percent for the full year 2002.


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