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24/07/2001
Amazon progress towards profitability
Online retailer Amazon is progressing towards profitability, after announcing that the company’s losses where beginning to fall.
However, Amazon revealed it had missed its original sales forecasts, which sent shares falling. Shares, which were well off their 12-month high of $49.63, closed down 5.6 per cent on Monday at $16.03.
Amazon revealed its pro forma loss for the second quarter was $58 million, compared to $116 million last year.
Although Amazon has yet to turn a profit, it has managed to become the world's largest retailer. And until quite recently, the six-year-old dot.com had focused on growing sales, rather than earnings, arguing that it needed to create economies of scale before turning a profit.
The company’s new strategy has meant cutting costs resulting in the closure of distribution centres, the shelving of plans for a new corporate headquarters and the cutting of 1,300, or 15 per cent, of its staff. (MB)
However, Amazon revealed it had missed its original sales forecasts, which sent shares falling. Shares, which were well off their 12-month high of $49.63, closed down 5.6 per cent on Monday at $16.03.
Amazon revealed its pro forma loss for the second quarter was $58 million, compared to $116 million last year.
Although Amazon has yet to turn a profit, it has managed to become the world's largest retailer. And until quite recently, the six-year-old dot.com had focused on growing sales, rather than earnings, arguing that it needed to create economies of scale before turning a profit.
The company’s new strategy has meant cutting costs resulting in the closure of distribution centres, the shelving of plans for a new corporate headquarters and the cutting of 1,300, or 15 per cent, of its staff. (MB)
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