Fueled by a 15 percent increase in sales, Amazon.com posted its first-ever net profit, beating its own fourth-quarter forecasts and Wall Street’s expectations.
The Seattle-based company, the world’s largest Internet retailer, said Tuesday that it earned $5 million, or 1 cent a share, compared with a net loss of $545 million, or $1.53 a share, a year ago. Sales were $1.12 billion, up from $972 million in the fourth quarter of 2000, and three times as much as most analysts had expected.
“We nailed this quarter,” said Chief Financial Officer Warren Jenson.
Investors agreed, bidding Amazon stock up $2.44, or more than 24 percent, to $12.60, on Nasdaq.
The company also recorded a pro forma profit, which excludes certain costs such as losses from investments, of $35 million, or 9 cents a share, compared with a pro forma loss of $90 million, or 25 cents a share, a year ago.
Analysts polled by Thomson Financial/First Call expected a pro forma loss of 7 cents a share for the latest period.
“I am impressed. There’s no question about that,” said hedge fund manager Scott Reamer of Union Tree Capital Research in Denver.
“E-commerce isn’t an easy matter,” said Jeetil Patel, an analyst with Deutsche Banc Alex. Brown. “It took the company $1.2 billion in revenue to achieve a profit. Not a lot of smaller companies will be able to pull this off.”
Chief Executive Jeff Bezos had promised to at least break even in the fourth quarter on a pro forma operating basis, and Amazon said it turned a $59 million profit on that basis, compared with a $60 million loss a year earlier.
For all of fiscal 2001, the company recorded a net loss of $567.3 million, or $1.56 a share, compared with a net loss of $1.41 billion, or $4.02 a share, in 2000. Sales were $3.12 billion, up from $2.76 billion in 2000.
In other earnings news:
– Lucent Technologies reported a slightly narrower loss for its fiscal first quarter despite a sharp revenue drop as the company continues to cut jobs and sell businesses in an effort to become profitable again.
The Murray Hill, N.J.-based telecommunications giant posted a net loss of $423 million, or 14 cents a share, for the quarter ended Dec. 31, compared with a loss of $464 million, or 14 cents a share, a year ago.
Excluding one-time items, Lucent lost $757 million, or 23 cents a share, beating Wall Street’s expectations by a penny. That compares with a loss of $1.44 billion, or 42 cents a share, a year ago.
Revenue for the quarter was $3.58 billion, down 18 percent from $4.35 billion a year ago.
More than 7,000 additional jobs, slightly more than previously announced, will be cut by June, chief financial officer Frank D’Amelio said, and the company should have a workforce of less than 55,000 by then, down from 74,000 at the end of last year.
That includes 12,000 workers at its Agere subsidiary, who will leave the payroll if Lucent is able to complete its repeatedly delayed spinoff of Agere by June.
Shares of Lucent picked up 25 cents, to $6.94, on the New York Stock Exchange.
– Merck & Co. reported a 5.7 percent increase in fourth-quarter profit as sales of three key drugs jumped more than 40 percent.
The Whitehouse Station, N.J.-based pharmaceutical giant said net income was $1.86 billion, or 81 cents a share, matching analysts’ forecasts. A year earlier, Merck had net income of $1.76 billion, or 75 cents a share.
Revenue increased 9.5 percent, to $12.56 billion from $11.47 billion a year earlier, mostly due to strong sales of cholesterol medicine Zocor, up 41 percent; osteoporosis treatment Fosamax, up 49 percent; and asthma drug Singulair, up 43 percent. Those performances offset a decline of 21 percent in the sales of the arthritis medication Vioxx.
For 2001, Merck posted a profit of $7.28 billion, or $3.14 a share, up from $6.82 billion, or $2.90 a share, in 2000. Revenue was $47.71 billion, up 18 percent from $40.36 billion in 2000.
Merck shares rose $1.29, to $59.29, on the NYSE.
– Johnson & Johnson said fourth-quarter profits increased 17 percent and announced that William Weldon will succeed retiring Chairman and CEO Ralph Larsen in April. Weldon is vice chairman and head of the company’s pharmaceuticals group.
The New Brunswick, N.J.-based company earned $1.1 billion, or 36 cents a diluted share, up from $936 million, or 30 cents a share, a year ago. The results met analysts’ expectations. Sales rose 15 percent, to $8.4 billion from $7.3 billion.
Net earnings for the year were $5.7 billion, or $1.84 a share, compared with $4.9 billion, or $1.61 a share, a year ago. Annual sales increased nearly 11 percent, to $33 billion from $29.8 billion in 2000.
Johnson & Johnson stock slid 58 cents, to $59.12, on the NYSE.
– International Paper Co. reported a fourth-quarter net loss of $572 million, or $1.19 a share, compared with a loss of $371 million, or 85 cents a share, a year earlier.
Excluding one-time charges, the world’s biggest paper company, based in Stamford, Conn., reported a profit of $58 million, or 12 cents a share, beating analysts’ estimates by 9 cents a share.
For the year, IP had a net loss of $1.2 billion, or $2.50 a share, on revenue of $26.4 billion. That compared with a profit of $142 million, or 32 cents a share, on revenue of $28.2 billion in 2000.
Shares of IP gained 69 cents, to $38.91, on the NYSE.
