...On Feb. 11, 2003, Standard & Poor's Rating Services affirmed its 'B' corporate credit rating on Amazon.com and revised its outlook on the company to stable from negative. The outlook revision is based on the company's increased rate of sales growth and improved operating performance during a difficult economic period. Amazon.com's rate of sales growth increased to 26% in 2002 from 13% in 2001 due to its free shipping program, increased product offerings, and continued growth of on-line sales. Moreover, the company's operating margin increased to 9.9% in 2002 from 4.5% in 2001 as a result of sales leverage and the company's focus on cost improvement. The ratings on Amazon.com reflect the risks of rapid growth in an evolving marketplace, weak levels of profitability, and a heavy debt burden. The ratings also incorporate the potential for margin pressure from intense retail competition and the fragile U.S. economy. These risks are tempered by Amazon.com's solid market position in on-line books,...
