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Amazon Nabs Record Profit, $60B Q4 Revenue, Sales Up 38%

Blowing past analysts’ forecasts, Amazon has posted a stellar fourth quarter earnings result, nabbing US$60.5 billion in revenue and a record net income of US$1.9 billion.

The company’s Q4 profit is reportedly its largest in history, having more than doubled compared to the same period last year. It did, however, including a US$789 million tax benefit courtesy of US tax reform.

Amazon notched US$3.75 earnings per share, far surpassing Thomson Reuters analysts’ forecasts of US$1.85 per share.

Following the strong earnings report, Amazon’s stock jumped 6% in after-hours trading.

The e-commerce behemoth’s strong numbers were largely driven by booming holiday sales and continued growth within its cloud business, Amazon Web Services.

In a statement, Amazon CEO Jeff Bezos revealed the company’s digital assistant, Alexa, would continue to see further investment:

 “Our 2017 projections for Alexa were very optimistic, and we far exceeded them. We don’t see positive surprises of this magnitude very often – expect us to double down”.

Amazon Web Services (AWS) retained its position as the company’s most profitable business, and fastest growing. Sales within the division soared 45% YOY, notching US$1.3 billion in operating income.

As such, Amazon Web Services reportedly represents 64% of Amazon’s total operating income.

in 2017, Amazon Prime gained a record number subscribers, with more than five billion items reportedly shipped via Prime internationally.

Overall, Amazon’s revenue increased 38% year-on-year. North America derived sales jumped 42% to US$37 billion.

International sales jumped 29% notching US$18 billion – notably including the recent launch of Amazon Australia. The company did not provide explicit financial information about its Australian operations (here).

Amazon Web Services (AWS) posted US$5.11 billion in revenue for the quarter, beating analysts’ expectations for US$4.97 billion.

Amazon CFO, Brian Olsavsky, affirms the results were driven by increased warehouse efficiency, especially in the holiday period. The continued expansion of AWS, coupled with the company’s advertising business was credited a “key contributor” to growth.

For the full year, whilst notching US$177.9 billion in sales (up 31%), Amazon’s yearly operating profit fell 2% to US$4.1 billion.

The company has offered a fourth quarter guidance of US$47.75 billion to US$50.75 billion – surpassing analysts’ expectations of US$48.6 billion.

Amazon’s Q1 operating income guidance came in under analysts’ expectations of US$1.5 billion, instead reporting between $300 million – US$1 billion. The results indicate heavy investments.

 

 

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