Amazon Post Third Straight Quarter Of Record Profit
E-commerce behemoth Amazon has achieved its third consecutive quarter of record profit, notching US$3.03 billion following strong holiday trading, and its growing cloud computing business.
Fourth quarter revenue lift 20% to $US72.38 billion, beating analyst expectations for $US71.88 billion.
Earnings per share notched US$6.04, trumping market forecasts for US$5.65.
It follows a profit of $US1.86 billion [$US3.75/share] the same quarter last year.
Lower margins from its traditional e-commerce business were offset by growth in cloud computing and advertising services.
For the quarter, cloud computing web services generated US$7.43 billion, surpassing expectations for around US$7.3 billion.
Cash flow has ballooned to US$21 billion, with Chief Executive Jeff Bezos crediting the success of Amazon’s voice assistant, Alexa, for increasing profit:
“Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year.”
Despite this, commentators express concern over the company’s ability to maintain its burgeoning revenue growth.
For the current Q1, Amazon has forecast revenues of US$56 billion – US$60 billion, and operating income of US$2.3 billion.
Projected revenues came in lower than analyst expectations for $US60.83 billion.
Shares in Amazon have since slumped by over 2% to US$1,683.
Concerning e-commerce performance, Amazon asserts the majority of profitability stems from third-party merchants.
For Q4, 52% of units were sold via third parties on its platform – revenues lift 27% to US$13.38 billion.
Taking on the likes of Google and Facebook, the company’s digital advertising business has also continued to grow. Amazon’s “other” category [i.e. largely from advertising] soared 95% in the quarter to US$3.39 billion.
Amazon has continued to threaten Microsoft’s cloud business, with its web services unit notching a 45% increase in sales to US$7.43 billion.