Amazon.com revenue rises 236 per cent

But Wall Street prophets shouldn't expect profits for a long time yet

Amazon.com's sales continue to expand, but its profits remain elusive -- and the company warned they will continue to be so for some time. The Internet bookstore yesterday posted a first quarter 1999 loss of $61.7 million on revenues of $293.6 million, and increase of 236 per cent on the same period last year. Half of Amazon's loss was put down to the company's ongoing acquisition programme -- excluding such charges, its loss falls to $36.4 million, better but still significant. In Q1 1998, Amazon posted a loss of $10.4 million. Still, the revenue increase is impressive, doubly so since it's higher than the strong sales figures the company posted for its Christmas quarter: for Q4 1998, the company recorded revenues of $253 million. That suggests the company is winning business and winning it fast, though CFO Joy Covey predicted the growth rate would slow as the novelty of new lines, such as videos and gifts, begins to wear off. Covey also warned that losses will deepen "substantially" in coming quarters as Amazon continues to expand its own business by buying others. Losses for coming quarters would be in the order of $60-90 million, she said. The company's oft-stated goal is to offer "anything" online, to become the Internet's answer to Harrods (elephants, anyone?), and it can do that more quickly by spending money and making acquisitions. And given Amazon's inflated stock price and the very rapid turnover of its publicly traded shares, it's unlikely to have dividend-hungry shareholders beating on its door and demanding profits, at least for the foreseeable future. ®

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