Amazon.com generated net sales of $1.95 billion, during fourth quarter 2003, up from $1.43 billion a year ago. Full-year sales were $5.26 billion, up from $3.93 billion in 2002.
The company’s fourth-quarter 2003 net income was $73 million, up from $3 million a year ago, and its annual income rose to $35 million, compared with a $149 million loss in 2002. The quarter and the year ended Dec. 31.
During fourth-quarter 2003, the Seattle-based online retailer saw its costs of sales rise to 78.1% of its total sales, up from 76.5% in fourth-quarter 2002. Its cost of sales was up for the entire year as well, rising from 74.8% a year ago to 76.1% in 2003.
So how did Amazon realize the income jump? First, through advantageous currency exchanges, which added $98 million to the fourth quarter and $232 million to the entire year.
But it also controlled its operating expenses, which dropped from 18.5% of its total sales in fourth quarter 2002 to 14.9%, and from 23.6% in 2002 to 18.7%. Specifically, its fulfillment, marketing, technology, administrative costs did not rise as quickly as its revenue.
Jeff Bezos, Amazon’s founder and CEO, attributed part of the company’s results to its free-shipping policy and competitive prices. But he also cited Amazon’s broad product offerings.
“In addition to purchasing thousands of $29 DVD players this holiday season, customers also bought Tibetan yak cheese, pomegranate molasses and zero carb cheese straws,” Bezos said in a statement.
Network
