Losses Widen for Amazon

Amazon.com Inc.'s second-quarter losses more than doubled compared with the second quarter of last year. The Internet retailer reported a net loss of $317.2 million, or 91 cents a share, in the second quarter, compared with a loss of $138 million a year ago. Analysts had predicted a loss of 33 cents a share for the quarter.

Sales for the quarter were $578 million, up from $314 million a year ago. The company's operating loss was $89 million, or 15% of sales, compared with an operating loss of $67 million, or 21% of sales, last year. Before Wednesday's earnings release, Amazon shares had dropped more than 4% to 36-1/16. Adding insult to injury, Amazon went dark Wednesday morning because of a technical glitch.

During a conference call with analysts, Amazon CEO Jeff Bezos said he received calls from many investors about company president Joseph Galli's abrupt announcement Tuesday that he was leaving to be CEO of VerticalNet. Bezos said many saw Galli as a symbol of Amazon's drive toward profitability, and they view Bezos as a symbol of "growth at any cost." He replied: "As CEO of this company, I am relentlessly committed to and passionate about our efficiency, productivity, and profitability."

Amazon shares will continue to be hammered if the company can't exceed market expectations, says David Yockelson, a Meta Group analyst. Says Yockelson, "Amazon is ahead of its time in personalization, but it hasn't built the mechanism to deal with returns from all over the globe."-