Amazon stock soars on profit, outlook
NEW YORK : Amazon.com Inc. said yesterday that its fourth-quarter profit rose 9 percent and easily surpassed analysts' forecasts. Those results, plus an optimistic forecast, sent its shares soaring 13 percent in extended trading. Amazon had called the holiday season its "best ever," and the earnings report backed up the idea that the online retailer is not being seriously hurt by cutbacks in consumer spending. Amazon said its revenue in the current quarter should be $4.53 billion to $4.93 billion, while analysts are expecting $4.57 billion. Shares of the Seattle-based company rose $6.39, or 12.8 percent, to $56.39 in after-hours trading. The stock had fallen 36 cents to finish regular trading at $50. Amazon said its profit in the fourth quarter was $225 million, or 52 cents per share. Analysts, on average, had been expecting 39 cents per share. Revenue rose 18 percent, to $6.7 billion, exceeding analyst estimates of $6.4 billion. Sales of items such as books, CDs and DVDs climbed 9 percent, to $3.64 billion, and sales of electronics and other merchandise rose 31 percent, to $2.89 billion. Amazon's gross profit margin declined to 20.1 percent, from 20.6 percent in the fourth quarter of 2007. In a conference call with reporters, Chief Financial Officer Tom Szkutak said the fall could be attributed to price cuts. For the full year, Amazon earned $645 million, or $1.49 per share, on $19.2 billion in revenue. The company earned $476 million, or $1.12 per share, on revenue of $14.8 billion during 2007.
Chrysler could get access to most Fiats
DETROIT : Chrysler LLC said yesterday that a proposed alliance with Fiat Group SpA would give the U.S. automaker access to nearly all Fiat vehicles. The company said the linkup would give Chrysler fuel-efficient small cars and save the Auburn Hills, Mich.-based automaker billions of dollars and years of development time to bring the products to market. Chrysler also said in a written statement it is making progress on cost concessions from stakeholders as it pursues the alliance with Fiat. Under the nonbinding, tentative deal announced last week, Fiat would get a 35 percent stake in Chrysler in exchange for its small-car and engine technology. The Italian automaker would not put any cash into the deal. The federal government is requiring Chrysler to secure cost concessions from bondholders and labor unions for Chrysler to justify up to $7 billion in government loans. The Fiat deal carries the same requirements.
Bon-Ton to cut 1,150 jobs, some bonuses
YORK, Pa. : Bon-Ton Stores Inc. said yesterday that it will eliminate about 1,150 jobs, get rid of 2008 senior executive bonuses and cut 2009 merit-based raises as it tries to slash costs to contend with the recession. The department store operator anticipates the moves will result in annual savings of $70 million. Bon-Ton said it will also suspend company contributions to the 401(k) program, adjust inventory levels and lower capital spending to $40 million. The moves, which will occur in fiscal 2009, will result in one-time costs of approximately $3 million. Bon-Ton runs 281 stores including 12 furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers names. It also operates stores under the Parisian name in the Detroit area.