Amazon.com reported its first-ever net profit yesterday, releasing fourth-quarter 2001 results buoyed by brisk holiday sales and a significant reduction in operating costs.
The e-commerce mammoth managed to beat analysts expectations, allowing it to set a goal of positive operating cash flow for the full year 2002.
Amazon Chief Financial Officer (CFO) Warren Jenson said: "This was a record quarter, and one that allowed us to hit on all four cylinders."
Offer The company said that it would extend its success to customers by continuing to reduce prices on books, and by introducing a new Super Saver Shipper program for its US customers, which permanently offers free shipping for all orders over $99.
Amazon reported fourth-quarter sales of $1.12 billion, compared to $972 million for the same period in the previous year, a 15 per cent increase. Net profit for the quarter totalled $5 million, or $0.01 per share, against a net loss of $545 million, or $1.53 per share a year earlier.
The company also reported pro forma net profits of $35 million, exceeding expectations set by Amazon founder and Chief Executive Officer (CEO) Jeff Bezos, who said earlier that the company would just reach breakeven by the fourth quarter. The pro forma results exclude non-operational, non-cash charges and benefits, as well as one-time charges, the company said.
Amazon executives pinned the success not only on a reduction of operating costs, but also on retaining customers and luring new ones through low book prices.
"We've lowered book prices to what would be a ridiculous level in the physical world," said Jenson.
Stock in Amazon jumped 25.69 per cent to $12.77 after the results were released yesterday.