Amazon.com had a net loss of $138 million on net sales of $314.4 million in the second quarter, ended June 30. The net loss increased 511.2%, and net sales rose 171.1%.
The company emphasized that $55.2 million of the net loss was on "merger, acquisition, investment-related costs and stock-based compensation charges." The company said it will continue to invest heavily in more products and expand distribution.
Without the special charges, Amazon.com's loss would have been $82.8 million, up 387% from $17 million a year earlier.
In early trading Thursday morning, the day after the announcement, Amazon.com stock fell steeply because some analysts had expected higher sales. Bloomberg News quoted Richard Zandi, an analyst at Salomon Smith Barney, as saying, "The fact they didn't blow away the numbers, and the company didn't provide enough detail into the numbers, means the bears will likely continue to have the field."
During 1999, Amazon.com has expanded its operations well beyond its base of book, music and video retailing to include selling toys and electronics and operating an auction site. It has also made significant investments in online retailers of pharmaceuticals, sports gear, groceries and other products and services. Moreover, it is setting up a national network of warehouses and by the end of the year will have four million square feet of warehouse space.
The company continues to expand its customer base. Cumulative customer accounts, including auction bidders and sellers, rose to 10.7 million.
In related news, the company announced a two-for-one stock split, effective September 1 (for shareholders as of August 12). It also announced that Joseph Galli, who was appointed president and CEO recently, has been elected to the board of directors. Galli was previously president of Black & Decker Worldwide Power Tools and Accessories.