Amazon has reported fourth-quarter results that exceeded analysts’ expectations, with earnings per share (EPS) at $1.00 compared to the anticipated 80 cents. The company’s revenue for Q4 reached $170 billion, surpassing the expected $166.2 billion. The stock rose more than 8% in extended trading following the announcement.
Key Points:
- Earnings Performance: Amazon’s net income surged to $10.6 billion, or $1.00 per share, a significant increase from $278 million, or 3 cents per share, in the same period the previous year. The robust earnings suggest that CEO Andy Jassy’s efforts to control costs and streamline operations are proving effective.
- Cost-Cutting Measures: Amazon had laid off 27,000 employees between late 2022 and mid-2023 and made strategic decisions, such as discontinuing unproven ventures. The company has been actively seeking ways to reduce expenses, including recent cuts in various units like Prime Video, MGM Studios, and Twitch.
- Revenue Growth: The company experienced a 14% increase in revenue, reaching $170 billion in Q4. The period included results from the holiday shopping season and Amazon’s Prime Day event in October, both of which exceeded the company’s expectations.
- AWS Performance: Amazon Web Services (AWS) reported sales of $24.2 billion in Q4, marking a 13% increase. While this represents a slight acceleration from the previous quarter, it is a deceleration compared to the year-ago period when AWS sales grew by 20%. The growth in AWS has shown some slowdown, but the company anticipates increased revenue from generative artificial intelligence (AI) products like “Q.”
- Advertising Unit: Amazon’s advertising unit posted a 27% year-over-year sales growth, reaching $14.7 billion. The company recently introduced ads on Prime Video content, aiming to generate additional revenue. Amazon plans to maintain low ad loads despite positive advertiser response.
- Outlook and Investments: Amazon provided strong guidance for the first quarter, with expected sales between $138 billion and $143.5 billion, representing an 8% to 13% growth. The company expressed its intention to continue investments in new areas and initiatives resonating with customers.
Amazon’s impressive Q4 performance and optimistic outlook contribute to its position as a dominant player in the e-commerce and technology sectors. The company’s focus on strategic investments and cost efficiencies aligns with its commitment to sustained growth.