Amazon Gets Little Credit
Jan 09 2001 12:00 AM PST
The retailer beats the drum for its holiday results, but so far it's still a solo act.
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Yesterday Amazon.com (AMZN) announced preliminary results for its fourth quarter. Sales were $960 million, up 42 percent, in line with the company's own forecast but shy of analysts' expectations. Jeff Bezos crowed, "We are very pleased that we not only met our goals for the top line but we also met them for the bottom line, too."
Good luck finding an analyst willing to be so upbeat. About the best Amazon got was the faint praise of ABN Amro analyst Kevin Silverman, quoted by Bloomberg: "This miss could have been worse, given what's going on out there." The BBC reported WR Hambrecht's Kristine Koerber's opinion that the figures were "good news for the company, especially given the retail environment disaster we've seen this past season." More typical of the analyst community's reaction was Scott Reamer of SG Cowen Securities (dossier). The Wall Street Journal noted that Reamer, "like many analysts," had been expecting sales exceeding $1 billion. "While it technically wasn't a miss, it effectively was one," Reamer said. Looking beyond the top line, Bloomberg's Greg Wiles talked to Deutsche Bank Alex. Brown analyst Jeetil Patel for insight on the company's gross profit figures. Patel pointed out that Amazon's liberal use of free shipping for holiday orders cut into the company's profitability growth. Still, ABN Amro's Kevin Silverman gave the company credit for holding its operating loss to the single digits, as it had targeted. Most outlets reported that Amazon's stock rose on the news in after-hours trading, though CBS MarketWatch spun the story to stress that the stock was losing steam. The New York Times found an analyst to downplay the stock angle too. Merrill Lynch (MER)'s Henry Blodget told the Times' Saul Hansell, "A lot of people are convinced that this company is about to go out of business. Any indication to the contrary means that some people will buy the stock to cover their short positions." The final word goes to Jeffrey Fieler of Bear Sterns, quoted by the BBC: "Yes, they'll live. Yes, they'll be profitable, but not as profitable as some expected."
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