Amazon.com Inc. (AMZN) said Tuesday its first-quarter net loss shrank from a year earlier and beat Wall Street expectations as the online megastore's sales rose a better-than-anticipated 21 percent.

In the previous quarter, typically its busiest because of holiday sales, Amazon posted a surprise first-ever net profit of 1 cent per share. In the latest quarter, it reported a net loss of $23 million, or 6 cents a share, compared to a net loss of $234 million or 66 cents a share a year earlier.

Revenues in the first quarter grew 21 percent to $847 million from $700 million a year earlier.

Amazon was expected to lose from 7 to 12 cents a share on revenue of about $805 million, according to Wall Street tracking firm Thomson Financial/First Call.

Amazon shares rose in after-hours trading to $14.95 after the financial results were announced. In regular Nasdaq trade the stock fell 1.8 percent to close at $14.06 Tuesday.

The Seattle-based retailer also raised it guidance for its current, second quarter, saying it expected sales of $765 million to $815 million, up as much as 22 percent over a year earlier and better than analysts' forecasts of about $750 million.

RAISING GUIDANCE

Amazon also said it expected to show a pro forma operating profit of $5 million to $15 million. It did not forecast a net profit or loss, but the company lost 16 cents a share in the second quarter of 2001, and analysts were expecting Amazon to lose from 8 to 11 cents a share.

For the full year, Amazon said it saw sales growing by more than 15 percent, with pro forma operating income of more than $100 million.

"We are ahead of schedule financially. Our continued operational progress and momentum allow us to further lower prices for customers and at the same time increase our 2002 guidance," Chief Financial Officer Warren Jenson said in a statement.

The solid results meant the company would effectively cut prices, offering 30 percent off on books of $15 or more, Amazon said. Previously, the discount was available only on books over $20.

"Our low-price strategy is working," Jenson told reporters on a conference call.

The Seattle-based company also said it had improved its results on a pro forma basis that excludes many costs like amortization of goodwill and stock-based compensation and is watched by analysts who use it to gauge core operations.

Pro forma operating profits for the quarter were $25 million, compared a loss of $49 million a year earlier, and beating its own guidance for a loss of between $16 million and breakeven.

BOOK BUSINESS SOLID, INTERNATIONAL SHINES

Jenson credited the better operations to a combination of more customers -- many attracted by free shipping on orders over $99 -- as well as more sales of high-margin used items and ongoing efficiency gains.

"The productivity improvements are really across the board, whether you're looking at technology, in the fulfillment centers or the customer service centers," Jenson told the conference call.

In the days running up to Amazon's earnings, analysts speculated sales could top initial forecasts because recent surveys have shown a strong rise in overall online commerce so far this year.

Sales in Amazon's core books, music and video segment, which hummed to life in the quarter again after a worrying decline, rose 8 percent to $443 million.

Sales from stores in Britain, Germany, France and Japan that make up Amazon's international segment, which was expected to show strong growth, rose to $225.5 million, up 71 percent from a year earlier.

Electronics, tools and kitchenware sales rose 8 percent to $126.2 million, while services, a small but high-margin business for Amazon, rose 25 percent to $52.7 million.