Amazon.com Announces Record Sales Driven by Lower Prices and Expanded Selection; Launches Jewelry Store; Raises Financial Guidance.

Business Wire › April 22, 2004

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Amazon.com Announces Record Sales Driven by Lower Prices and Expanded Selection; Launches Jewelry Store; Raises Financial Guidance.

Business Editors/High-Tech Writers

SEATTLE--(BUSINESS WIRE)--April 22, 2004

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2004.

Operating cash flow was $393 million for the trailing twelve months, compared with $164 million for the trailing twelve months ended March 31, 2003. Free cash flow grew $221 million, or 180%, to $344 million for the trailing twelve months, compared with $123 million for the trailing twelve months ended March 31, 2003.

Common shares outstanding plus shares underlying stock-based awards totaled 432 million at March 31, 2004, flat compared with a year ago.

Net sales were $1.53 billion in the first quarter, compared with $1.08 billion in first quarter 2003, an increase of 41%. Net sales, excluding the $87 million benefit from changes in foreign exchange rates, grew 33% compared with first quarter 2003.

Operating income was $110 million in the first quarter, compared with $39 million in first quarter 2003. Consolidated segment operating income grew 73% to $117 million in the first quarter, compared with $67 million in first quarter 2003. Consolidated segment operating income, excluding the $7 million benefit from changes in foreign exchange rates, grew 64% compared with first quarter 2003.

Net income was $111 million in the first quarter, or $0.26 per diluted share, compared with a net loss of $10 million, or $0.03 per share, in first quarter 2003. Pro forma net income in the first quarter grew 141% to $97 million, or $0.23 per diluted share, compared with $40 million, or $0.10 per diluted share, in first quarter 2003.

"During our beta test more than 100,000 customers ordered items from our Jewelry store," said Jeff Bezos, founder and CEO of Amazon.com. "While the average margin in jewelry retailing is approximately 45% to 50%, we target substantially lower margins on our jewelry sales, and lower still -- about 13% -- on diamond jewelry. This is in keeping with our strategy of driving growth through low prices."

Amazon.com continues to offer Free Super Saver Shipping on orders over $25 at www.amazon.com and also has free shipping offers at its U.K., German, French, Japanese and Canadian sites. Amazon...

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