Amazon.com has reported its second quarterly net profit amid buoyant holiday sales in the last three months of 2002 and its free shipping incentive.
The online retailer's fourth-quarter sales rose 28 per cent on last year, leading the company to increase its full-year sales forecast for 2003 to a gain of at least 15 per cent, a 10 per cent increase on its previous projection.
Analysts had expected Amazon to increase its outlook for 2003, and some questioned whether the company's lofty valuations could be justified after share prices rose by nearly 75 per cent in the past year.
The improved outlook came as the Seattle-based company posted its second-ever quarterly profit of $2.6 million on the back of its free shipping offer for orders over $25, an incentive that it made permanent on the strength of its strong holiday quarter.
Amazon Chief Executive Mr Jeff Bezos said that the company had achieved a key objective for 2002, in becoming cash-flow positive.
Free cash flow, which includes cash outflows for interest and capital expenditures but excludes proceeds from stock-options, was $135 million for 2002, compared with negative $170 million for 2001, Amazon said.
For the first quarter of 2003, the online retailer said it expects pro forma net profit of between $5 million, or 1 cent per share, and $20 million, or 5 cents per share.
Amazon's pro forma figures include interest expenses but strip out a range of charges such as stock-based compensation, amortisation and other charges.