expects 2002 profit

July 23, 2002 at 6:31 PM
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SEATTLE, July 23 (UPI) -- reported a narrower-than-expected loss Tuesday in its second quarter as sales grew faster than analysts had forecast due to heavy discounting.

The Seattle-based online retailer also said it expects to post a pro forma profit this year and that it will begin expensing stock options in 2003. Coca-Cola said last week it would begin expensing the cost of all of its stock option plans later this year.

In its earnings report, said outstanding employee stock options totaled about 50 million shares. did not provide projections for 2003 and the impact on stock-option expenses.

Shares of lost 95 cents, or 6.13 percent, to close Tuesday at $14.55 on volume of 11.2 million shares traded on the Nasdaq stock market. The stock was off more than 7 percent to $13.48 in after-hours trading.

After the market closed Tuesday, reported a second-quarter loss of $94 million, or 25 cents per share, compared to a loss of $168 million, or 47 cents, in the year ago period.

Excluding certain items, said it lost $4 million, or 1 cent per share. Wall Street analysts surveyed by Thomson Financial/First Call expected pro forma numbers for to show a second-quarter loss of 6 cents a share on sales of $789 million.

"I'm especially pleased with the outstanding job our U.S. Books team is doing -- posting another quarter of 20 percent year-over-year book unit growth, up from 15 percent growth this past fourth quarter," said Jeff Bezos, founder and chief executive officer of, in a statement.

Bezos said lower prices and expanded selection also helped Electronics, Tools and Kitchen revenues increase. In June, the company announced its fourth significant price decrease in the past year.

Going forward, said it expects to post sales between $780 million and $830 million in the third quarter. also said it expects to post pro forma operating income between $8 million and $17 million.

For the full year, the company expects to post a pro forma profit.

(Reported by Chris Sieroty, UPI Technology Correspondent, in Washington.)

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