Amazon.com Chief Executive Jeff Bezos renewed his pledge to focus on free-cash-flow growth amid investor concern about slowing sales and...

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Amazon.com Chief Executive Jeff Bezos renewed his pledge to focus on free-cash-flow growth amid investor concern about slowing sales and profits at the world’s largest Internet retailer.

“Our ultimate financial measure, and the one we most want to drive over the long-term, is free cash flow per share,” wrote Bezos in his annual letter to shareholders, which was included in a Securities and Exchange Commission filing Tuesday.

Concentrating on earnings growth and ignoring other components of cash flow can “impair shareholder value,” he wrote.

Amazon defines free cash flow as cash from operations minus interest expense and costs for assets such as software and Web-site development. The Seattle-based retailer also excludes money from employees exercising stock awards.

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Free cash flow, in general, measures how much cash a company has left after making payments necessary to maintain normal operations.

Amazon boosted free cash flow in 2004 by 38 percent to $477 million.

The company’s shares have fallen 25 percent in the past year, partly as investors have worried that increased spending on shipping and hiring of more technology specialists will hurt profit growth.

Analysts have lowered 2005 earnings estimates.

“Amazon.com’s plea [while fair] is only likely to fuel concerns about earnings growth,” said Banc of America Securities analyst Aram Rubinson in a research note yesterday. He has a “sell” rating on the shares.

Bezos’ view on Amazon’s financial metrics is unchanged since 1997, when he wrote in the first annual report that, given a choice, he would increase cash flows over maximizing profits. Amazon’s quarterly-earnings releases start with an update on cash flow before giving sales and profit.

Bezos’ letter this year expanded on his views about cash flow and included examples of how a company could report higher profit or earnings before interest, taxes, depreciation and amortization while eating into shareholder value.

Instead, Amazon focuses on increasing operating profit while managing its working capital and spending to increase cash flow, which leads to higher share prices, Bezos wrote.

“Cash-flow statements often don’t receive as much attention as they deserve,” wrote Bezos, who founded Amazon in 1994 after working at investment firm D.E. Shaw & Co. “Discerning investors don’t stop with the income statement.”

Amazon’s profit excluding certain costs will rise 14 percent from 2004 to $1.06 a share this year, according to Thomson Financial’s survey of 22 analysts. Last year, earnings on this basis rose 52 percent to 93 cents a share from a year earlier.