) were down after the online retailer posted $0.16 Q3 loss vs. $0.25 loss on a slight revenue rise. The company sees flat to 10% Q4 revenue growth. Merrill Lynch downgraded Amazon.com to near term neutral from accumulate.
Analyst Henry Blodget says Q3 results were in line with his expectations. As expected, management reduced its Q4 revenue forecast. While the company continues to make progress toward profitability, revenue growth continues to decelerate, according to Blodget. He notes that core U.S. retail sales declined 9%, year-over-year. He adds that a rapid mix shift from new merchandise sales to "used" eBay-like commissions is exacerbating the slowdown.
The analyst still thinks Amazon will build a successful business, but with little visibility into 2002, and prospects for additional declines in its core business, he considers the stock expensive. Blodget maintains his long term buy rating on the shares.