Amazon.com raises outlook for year
Amazon.com, the internet's largest retailer, has said higher revenue and cost-cutting have helped it narrow its quarterly loss and raise its outlook for the year.
Shares of the Seattle-based web merchant rose more than 6% after it reported a net loss of $43m (€37.7m), or 11 cents per share, in its second quarter, compared with a net loss of $94m (€82m), or 25 cents, a year earlier.
Consumers bought 42% more items from Amazon's webstore, enticed by its free shipping offers and lower prices, helping to drive revenue 36.5% higher, Chief Financial Officer Tom Szkutak said.
The company declined to detail any plans to start offering songs through its website, although Amazon has already expressed interest and industry analysts expect such a move in the coming months.
Shares of Amazon jumped 6 percent after the results were released, hitting $37 in after hours trading compared to the Nasdaq closing level of US$34.87.
Some analysts have cautioned that Amazon's share rise is beginning to outpace its future ability to grow, but overall the view is that their core business remains strong.
Chief Executive Jeff Bezos said the web retailer's strategy of shifting advertising money into free shipping incentives earlier this year are starting to pay off.
Second-quarter revenue rose to $1.1bn (€996m) from $806m (€706m) a year earlier, beating forecasts by Amazon as well as the average of analysts' predictions.
Sales overseas are growing faster than at home, CFO Szkutak said, with US sales up 20% from a year earlier while international sales were 81% higher.
For 2003, Amazon said it now expects its sales of books, music, electronics and other goods to grow at least 25 percent year-on-year to between $4.9bn (€4.29bn) and $5.1bn (€4.47bn) instead of its previous forecast of $4.7bn (€4.12bn).
Szkutak said that several factors were behind the raised guidance, including the prospect of currency gains and the general health of the economy.
