Shares in Amazon.com plunged 17 per cent in early trading in New York today after the company warned that revenue would fall below expectations in the fourth quarter.
Shares in the world's largest Internet retailer fell $1.63 to $7.92 on the Nasdaq, well off the company's 52-week high of around $40.
The drop came after chief financial officer Mr Warren Jenson cautioned last night that fourth-quarter net sales would be flat or rise at most by 10 per cent, compared with last year.
Mr Jenson said the company still hopes to reach its goal of pro forma operating profitability, which excludes many costs, by the fourth quarter of this year, but also cautioned that the uncertain post-September 11th economic climate made it hard to predict the future.
Analysts, however, were less concerned with the company meeting that goal than with signs that its core business is deteriorating.
Net sales in books, music and video, the company's largest division, fell by 12 per cent in the third quarter, compared with the same period last year.
"The biggest issue is that there is a major slowdown in their core business that will not be offset, at least in the next several quarters," by deals with retailers or growing businesses such as used books, said Mr Scott Reamer, an analyst with SG Cowen Securities.
For the quarter ended September 30th, Amazon.com had a net loss of $170 million compared with a loss of $241 million in the same period last year.
Amazon earlier this quarter announced a partnership to provide the infrastructure and payment system for Target's Web site and said yesterday that site would launch by mid-2002. That follows deals with Toys 'R' Us, Borders and AOL.
For the nine months ended September 30th, the company reported a net loss of $572 million compared with a loss of $866 million in the same period last year.
Net sales were $2 billion, up from $1.79 billion in 2000.
AP