Amazon (AMZN) reported fourth-quarter results that exceeded analysts' expectations for both sales and bottom line profits. The e-commerce giant reported earnings per share of $1.00, compared to expectations of $0.78. Net sales were $169.96 billion, exceeding expectations of $166.21 billion. Guidance for the first quarter was also largely in line with expectations.
Yahoo Finance's Julie Hyman and Josh Lipton have the latest details.
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Editor's note: This article was written by Stefanie Mikulic.
video transcript
Julie Hyman: Amazon's profit will be $1 per share. This is better than his $0.78 estimated here. Overall net sales for the fourth quarter were approximately $170 million. This also exceeded expectations of approximately $166.2 billion.
Now let's focus on some important points here. First, AWS excluding the impact of exchange rates. Revenue from AWS, Amazon Web Services, or the cloud business, grew 13%. The forecast for the fourth quarter is an 11.8% increase. In other words, AWS revenue exceeded expectations.
Lastly, I would like to touch on our outlook for the first quarter. Therefore, first quarter net sales are expected to be between $138 billion and $143.5 billion. Analysts had expected $142 billion. So the midpoint of 138 to 143 actually leaves a little room to miss, but that ceiling may be comfortably above that in the eyes of investors. From what I've seen so far, Josh, the only ones I've seen that are a little bit below estimate are brick-and-mortar stores, mostly Whole Foods, but most, if not all, and he's $5.1 billion. It was $50 million. That's not a small estimate. But otherwise, you almost always win here.
Josh Lipton: Yeah. See the immediate reaction of investors. At least initially, here, apparently, is what they see. Well, I think the cloud computing business is very important, just focusing on AWS. Because that's the profit center of this company. And XFX's net sales rose 13%, outpacing the Street's rise of about 11.8%.
And now, what investors really want to know is: What will AWS's growth look like in the coming quarters, not just its growth, but its profits? And what will be the driver there?
Julie Hyman: Yeah. As you know, we said our first quarter revenue forecast, the median is slightly below the average forecast. However, operating income is higher. And keep in mind, it feels like Amazon usually trades on profitability rather than sales, at least these days (correct me if I'm wrong). The fourth-quarter operating margin also exceeded expectations in terms of profitability, coming in at 7.8% versus analysts' expectations of around 6.2%.
The operating profit forecast was in the middle of that range, at $8 billion to $12 billion, higher than analysts' expectations of around $9.1 billion. Therefore, profitability here is favorable for the company. So it seems like that is also helping to solve the problem.
