Amazon.com (AMZN) reported its quarterly results on Thursday, surpassing expectations for both earnings and revenue. As a result, Amazon stock saw a significant increase in after-hours trading.
The e-commerce and cloud-computing giant announced earnings of $1 per share on sales totaling $170 billion for the quarter ending in December. Analysts had predicted earnings per share of 80 cents on $165.9 billion in sales for the same period, according to FactSet.
Quarterly sales experienced a 14% year-over-year increase, while earnings surged from 3 cents per share in the year-ago quarter.
Amazon Web Services (AWS), the company’s cloud business, reported a 13% year-over-year increase in sales to $24.2 billion, meeting expectations for this crucial segment.
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For the upcoming quarter, Amazon forecasted sales ranging from $138 billion to $143.5 billion. Analysts had anticipated $142 billion in sales for the March quarter, as per FactSet.
In after-hours trading, Amazon’s stock rose more than 8%, reaching $172.39.
Here’s a breakdown of Amazon’s performance in the fourth quarter:
- Direct online store sales rose 8% annually to $70.5 billion, surpassing expectations.
- Advertising emerged as Amazon’s fastest-growing business, with sales increasing by 26% year over year to $14.7 billion. Notably, Amazon recently introduced advertising on its Prime video service.
- Third-party seller services, which include fees collected from companies selling on Amazon’s platform, saw a 19% increase in revenue to $43.6 billion.
- Revenue from physical stores, including Whole Foods, increased by 4% to $5.2 billion.
The 13% year-over-year growth in AWS sales marked an improvement from the third quarter’s 12% growth rate. Analysts have been closely monitoring AWS’s performance for signs of reacceleration following a slowdown in growth last year.
AWS remains a significant profit driver, contributing $7.2 billion in operating income out of Amazon’s total operating income of $13.2 billion for the quarter.
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CEO Andy Jassy expressed satisfaction with Amazon’s performance, highlighting record-breaking holiday shopping and ongoing innovations to enhance the customer experience across its businesses.
Leading up to the report, Amazon’s stock had gained 2.8% in Thursday trading, closing at $159.67. Additionally, Amazon introduced Rufus, a new generative-AI-powered shopping assistant aimed at enhancing the shopping experience for customers.
Amazon’s shares have increased by approximately 6% since the beginning of the year, building upon an impressive 81% surge last year. The company boasts a Relative Strength Rating of 89, indicating strong outperformance compared to other stocks over the past 12 months, according to IBD Stock Checkup. Additionally, Amazon holds a robust IBD Composite Rating of 92 out of 99, reflecting strength across various technical and fundamental metrics associated with strong stock performance.
