Online retail giant Amazon.com Inc. posted a smaller quarterly loss Tuesday, just beating Wall Street estimates, but said it would cut 15 percent of its workforce to help it reach profitability by the end of the year.
Amazon, which sells everything from books to electronics to hardware, said the 1,300 job cuts would come in part from closing a distribution center in McDonough, Ga., with 450 workers, and a customer service center in Seattle with about 400.
By slashing jobs, Amazon joins a number of other companies–both online-focused and brick-and-mortar–who are streamlining their operations in the face of a slowing U.S. economy. In Amazon’s case, the cuts will result in a charge of more than $150 million this year.
Amazon also drastically trimmed back its sales forecasts for 2001, projecting that revenue would grow by 20 to 30 percent, to between about $3.3 billion and $3.6 billion. Last year, the company said sales would hit $4 billion in 2001.
For the fourth quarter, Amazon lost $545 million, or $1.53 per share, compared with $323.3 million, or 96 cents per share, in the year-ago period. Excluding one-time items and goodwill, Amazon lost $90.4 million, or 25 cents per share for the quarter, compared with $184.9 million, or 55 cents per share, last year.
Analysts surveyed by First Call/Thomson Financial were expecting a loss of 26 cents per share.
Fourth-quarter sales rose 44 percent, to $972 million.
Investors sent shares lower in after-hours trading after its stock finished the regular session on the Nasdaq stock market at $18.94, down $1.19.
For all of 2000, Amazon reported a net loss of $1.41 billion, or $4.02 per share, compared with $720 million, or $2.20 per share, for 1999. Sales rose to $2.76 billion from $1.64 billion.
– Procter & Gamble Co.’s earnings rose 6 percent in its fiscal second quarter, despite a 4 percent sales decline. The results slightly beat Wall Street expectations, and its stock rose more than 6 percent.
The huge consumer products company earned $1.19 billion, or 84 cents per share, for the quarter ended Dec. 31, versus $1.13 billion, or 78 cents per share, a year earlier. Excluding one-time items, earnings totaled $1.31 billion, or 93 cents per share, compared with $1.26 billion, or 88 cents, last year.
The core net earnings of 93 cents per share topped the 92 cents analysts surveyed by First Call/Thomson Financial had expected.
On Tuesday, Procter shares rose $4.25, to $71.10, on the New York Stock Exchange.
A year ago, P&G’s failure to meet quarterly earnings projections made 2000 one of the most turbulent in P&G’s history and eventually prompted the company to oust Durk Jager as chief executive in favor of Alan Lafley.
Lafley said Tuesday’s earnings report was a step toward consistency, but he still wants to get P&G back to double-digit annual increases in earnings per share.
“We delivered the earnings-per-share results we said we would–for the second quarter in a row. Still, we can and must do better,” Lafley said.
Global sales fell to $10.2 billion from $10.6 billion.
– United Parcel Service Inc., buoyed by solid international growth and rising revenue from non-package operations, reported a fourth-quarter profit above Wall Street’s lowered expectations, prompting a modest rise in the delivery company’s shares.
But UPS, the world’s No. 1 package delivery company, said a U.S. economic slowdown had led it to cut its forecast for earnings growth in 2001 to between 9 percent and 11 percent from a previous estimate in the “mid-teens.”
The Atlanta-based company also said revenue growth would likely fall within a range of 8 percent to 10 percent this year.
Shares of UPS gained 80 cents to close at $61.60 on the New York Stock Exchange.
In the fourth quarter, UPS earned $724 million, or 63 cents a share, compared with $661 million, or 56 cents a share, a year earlier. Analysts on average had expected UPS to earn 61 cents in the period, according to First Call.
Revenue rose 6 percent, to $7.9 billion from $7.45 billion.
For the year, UPS had net income of $2.93 billion, or $2.50 per share, up from $883 million, or 77 cents per share, in 1999. The 1999 results were affected by $1.78 billion UPS put into an escrow account pending appeal of a tax court judgment it lost. Revenue rose 10 percent to $29.77 billion, up from $27.05 billion in 1999.
– Aetna Inc. said its fourth-quarter operating income fell nearly 48 percent, but the company, now operating solely as a health insurer, still beat Wall Street expectations.
Aetna reported operating income of $28.7 million, or 20 cents per share, before one-time charges. Operating income on a similar basis in 1999 totaled $81 million, or 55 cents per share, the company said. The results beat Wall Street expectations of 16 cents a share, according to First Call.
