Amazon Scores Big with Q4 Earnings, Stock Surges Over 8%

Amazon, the e-commerce and cloud-computing giant, delivered impressive fourth-quarter results, surpassing expectations for both earnings and revenue. The company reported earnings per share of $1.00, beating analysts’ projections of 80 cents, and achieved sales of $170 billion for the December quarter, reflecting a robust 14% year-over-year growth. Investors responded positively, with Amazon’s stock rising over 8% in after-hours trading.

Key Highlights:

• Sales Breakdown:
• Direct online store sales rose by a better-than-expected 8% to $70.5 billion.
• Advertising emerged as Amazon’s fastest-growing business, with sales soaring 26% year over year to $14.7 billion.
• Third-party seller services, including fees from companies selling on Amazon, increased by 19% to $43.6 billion.
• Amazon Web Services (AWS) achieved $24.2 billion in sales, marking a 13% YoY growth.
• Outlook and Guidance:
• For the first quarter, Amazon anticipates sales between $138 billion and $143.5 billion, signaling growth of 8% to 13%. Analysts expected revenue of $142.1 billion.
• Amazon Web Services (AWS) maintained its strong performance, providing $7.2 billion in operating income out of the company’s total operating income of $13.2 billion.
• Strategic Initiatives and Investments:
• CEO Andy Jassy’s cost-reduction efforts, including layoffs and operational streamlining, contributed to a surge in net income to $10.6 billion.
• Despite laying off 27,000 employees, Amazon remains focused on strategic investments, such as the introduction of generative AI-powered shopping assistant Rufus.
• Advertising on Prime Video and AWS generative AI products, like “Q,” have gained traction, with expectations of significant revenue in the coming years.
• Advertising Impact:
• Amazon’s advertising unit experienced a remarkable 27% YoY growth, reaching $14.7 billion in sales.
• The company’s move to display ads on Prime Video content is anticipated to bring substantial new revenue.

Amazon’s Q4 performance demonstrates a record-breaking holiday shopping season, closing a robust 2023. The company remains committed to innovation and customer experience improvements, and with its solid financials, it continues to be a market leader, reflecting in an 8% stock surge after-hours.