Amazon reports better-than-expected results as revenue jumps 14%

Amazon
on
Thursday

reported
fourth-quarter
results
that
sailed
past
analysts’
estimates,
and
gave
strong
guidance
for
the
current
quarter.
The
stock
climbed
more
than
8%
in
extended
trading.

Here
are
the
results:

• 
  Earnings
  per
  share:
  $1.00
  vs.
  80
  cents
  expected
  by
  LSEG,
  formerly
  known
  as
  Refinitiv
• 
  Revenue:
  $170
  billion
  vs.
  $166.2
  billion
  expected
  by
  LSEG

Wall
Street
is
also
watching
several
other
numbers
in
the
report:

• 
  Amazon
  Web
  Services:
  $24.2
  billion
  vs.
  $24.2
  billion,
  according
  to
  StreetAccount
• 
  Advertising:
  $14.7
  billion
  vs.
  $14.2
  billion,
  according
  to
  StreetAccount

Amazon
said
first-quarter
sales
will
be
between
$138
billion
and
$143.5
billion,
representing
growth
of
8%
to
13%.
Analysts
were
expecting
revenue
of
$142.1
billion,
according
to
Refinitiv.

Amazon
easily
topped
Wall
Street’s
expectations
for
earnings,
indicating
that
CEO
Andy
Jassy’s
efforts
to
rein
in
costs
are
paying
off.
Net
income
surged
to
$10.6
billion,
or
$1.00
per
share,
compared
to
$278
million,
or
3
cents
per
share,
a
year
earlier.

The
company
laid
off
27,000
employees
between
late
2022
and
mid-2023,
and
ended
some
of
its
more
unproven
bets.
It
has
continued
to
look
for
ways
to
trim
expenses
in
other
areas,
such
as
its
fulfillment
business.
In
January,
it
announced
cuts
in
Prime
Video,
MGM
Studios
and
Twitch,
among
other
units.

Amazon
CFO
Brian
Olsavsky
told
reporters
on
Thursday
that
the
company
will
continue
to
take
a
careful
approach
on
new
investments,
but
that
it
doesn’t
see
2024
“as
a
year
of
efficiency
type
thing.”

“We’re
going
to
continue
to
invest
in
new
things
and
new
areas
and
things
that
are
resonating
with
customers,”
Olsavsky
said.
“Where
we
can
find
efficiencies
and
do
more
with
less,
we’re
going
to
do
that
as
well.”

Revenue
jumped
14%
to
$170
billion
in
the
fourth
quarter.
The
period
reflects
results
from
the
holiday
shopping
season
and
Amazon’s
October
Prime
Day
event,
both
of
which
the
company
said
exceeded
its
expectations.

“This
Q4
was
a
record-breaking
Holiday
shopping
season
and
closed
out
a
robust
2023
for
Amazon,”
Jassy
said
in
a
statement.
“As
we
enter
2024,
our
teams
are
delivering
at
a
rapid
clip,
and
we
have
a
lot
in
front
of
us
to
be
excited
about.”

Sales
at
Amazon
Web
Services
climbed
13%
in
the
fourth
quarter
to
$24.2
billion,
in
line
with
Wall
Street’s
forecast.
That
marks
a
slight
uptick
from
the
previous
quarter,

when
sales
expanded
12%,
but
it’s
a
deceleration
from
the
year-ago
period,
when
sales
grew
20%.

For
the
past
year,
growth
in
AWS
has
slowed,
as
businesses
trimmed
their
cloud
spend.
But
Olsavsky
said
the
company
is
seeing
those
cost
optimizations
diminish,
and
new
workloads
are
picking
up.
He
said
there
has
been
“a
lot
of
interest”
in
AWS’
generative
artificial
intelligence
products,
such
as
“Q,”
an
AI
chatbot
for
businesses.

Jassy
said
on
a
conference
call
with
analysts
that
generative
AI
services
remain
a
“relatively
small”
business,
but
the
company
believes
they
could
drive
“tens
of
billions
of
dollars”
in
revenue
within
the
next
several
years.

Ahead
of
its
earnings
release
Thursday,
Amazon

announced
a
generative
AI
shopping
assistant,
dubbed
Rufus,
which
it’s
testing
among
a
subset
of
users
in
the
U.S.

Amazon’s
profitable
advertising
unit
saw
sales
grow
27%
year
over
year
to
$14.7
billion.
Last
month,
the
company
began
showing
ads
on
Prime
Video
content,
in
a
move
analysts
project
will
generate
substantial
new
revenue
for
the
business.
Olsavsky
said
the
company
has
seen
“a
lot
of
enthusiasm”
from
advertisers,
but
that
Amazon
plans
to
keep
ad
loads
low.