Amazon.com Inc. has settled a securities class action for $27.5 million that alleged its executives lied about the company’s financial condition, The Associated Press reports.
In its annual report filed with the Securities and Exchange Commission, the Seattle-based Internet retailer said the plaintiffs alleged in August 2003 that the company and some of its officers made false or misleading statements from Oct. 29, 1998, through Oct. 23, 2001, the AP reports. It said it expects most, if not all, of the settlement will funded by its insurers.
The company said it is facing another lawsuit alleging that it made false or misleading statements in connection with a February 2000 offering of convertible bonds.
Amazon.com said its expects its net income for 2005 to decline from a year ago because of a tax provision and expects it will pay taxes of $25 million for the period, compared with $4 million in 2004, the AP reports.
In the year ended Dec. 31, 2004, the company received a tax benefit of $232.6 million, which led to 2004 net income of about $588.5 million, the AP reports. Amazon.com made changes in its valuation assessment of deferred tax assets during 2004.
Amazon.com reiterated that it expects net sales of between $8.05 billion and $8.65 billion for 2005, the AP reports. It expects operating income of $385 million and $510 million, which assumes, among other things, stock compensation expense of $115 million, and no further revisions to its restructuring-related estimates.
In 2004, Amazon.com had sales of $6.92 billion and operating income of $440.4 million.