10-QPeriod: Q1 FY2002

AMAZON COM INC Quarterly Report for Q1 Ended Mar 31, 2002

Filed April 24, 2002For Securities:AMZN

Summary

Amazon.com, Inc. (AMZN) reported its first quarter 2002 results, showcasing a significant year-over-year improvement despite a net loss. Net sales for the first quarter ended March 31, 2002, increased by 21% to $847.4 million, up from $700.4 million in the same period last year. This growth was primarily driven by the International segment, which saw a 71% increase in net sales, and the U.S. Books, Music, and DVD/Video segment, with an 8% rise. While the company still reported a net loss of $23.2 million ($0.06 per share) for the quarter, this is a substantial improvement from the $234.1 million ($0.66 per share) net loss recorded in the first quarter of 2001. Notably, the company achieved its first operating income in the quarter, a positive sign for its path towards profitability.

Key Highlights

  • 1Net sales grew 21% year-over-year to $847.4 million.
  • 2International segment net sales increased significantly by 71%.
  • 3Net loss improved substantially to $23.2 million from $234.1 million in the prior year quarter.
  • 4Achieved first-ever operating income of $1.8 million for the quarter.
  • 5Gross margin remained stable at 26% year-over-year.
  • 6The company continues to manage operating expenses effectively, with Fulfillment, Marketing, Technology & Content, and General & Administrative expenses decreasing as a percentage of net sales compared to the prior year.
  • 7Significant restructuring charges from the prior year ($114.3 million) were reduced to $10.0 million in the current quarter, contributing to the improved net loss.

Frequently Asked Questions

Amazon reported a 21% increase in net sales to $847.4 million for the first quarter ended March 31, 2002. While the company still incurred a net loss of $23.2 million, this represents a significant improvement from the $234.1 million net loss in the same period last year. Importantly, Amazon achieved its first operating income of $1.8 million in the quarter.

The International segment was the primary growth driver, with net sales increasing by 71% year-over-year. The U.S. Books, Music, and DVD/Video segment also showed renewed growth with an 8% increase in net sales.

Amazon expects pro forma income from operations to be between $5 million and $15 million for the second quarter of 2002 and over $100 million for the full year 2002. While the company achieved its first operating income in the current quarter, management cautions that this may not be indicative of future trends due to factors like stock-based compensation treatment.

Amazon adopted new accounting standards for inventory costing (FIFO) effective January 1, 2002, and for goodwill and other intangibles (SFAS 142) effective January 1, 2002. The adoption of SFAS 142 significantly reduced amortization expenses related to goodwill and intangibles, contributing to the improved net loss. The change in inventory costing had a minimal impact.