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Amazon, the e-commerce giant led by CEO Andy Jassy, reported fourth-quarter results that exceeded analyst expectations, propelling the company’s stock up more than 8% in extended trading. The robust earnings and a positive outlook for the current quarter showcased the success of Jassy’s cost-cutting measures and strategic initiatives.
Here are the key highlights from Amazon’s Q4 earnings report:
– Earnings Per Share (EPS): $1.00, surpassing the expected 80 cents (according to LSEG, formerly Refinitiv).
– Revenue: $170 billion, beating the expected $166.2 billion (according to LSEG).
– Amazon Web Services (AWS) Revenue: $24.2 billion, in line with Wall Street’s forecast.
– Advertising Revenue: $14.7 billion, surpassing the expected $14.2 billion.
– First-Quarter Sales Outlook: Between $138 billion and $143.5 billion, representing 8% to 13% growth.
The impressive financial performance reflected Amazon’s effective management of the holiday shopping season and the success of its Prime Day event in October. Amazon exceeded its own expectations, reporting a record-breaking Q4.
CEO Andy Jassy expressed enthusiasm for the company’s accomplishments, stating, “This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon. 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.”
Amazon’s net income surged to $10.6 billion, or $1.00 per share, compared to $278 million, or 3 cents per share, in the same period last year. Jassy’s focus on cost optimization included laying off 27,000 employees between late 2022 and mid-2023, as well as discontinuing some less viable ventures. The company continues to seek efficiencies in various areas, exemplified by recent cuts in units such as Prime Video, MGM Studios, and Twitch.
While emphasizing a cautious approach to new investments, CFO Brian Olsavsky stated that Amazon doesn’t view 2024 as a year focused solely on efficiency. The company plans to invest in new areas that resonate with customers while optimizing existing processes.
Amazon Web Services (AWS) reported a 13% growth in the fourth quarter, with revenues reaching $24.2 billion, consistent with Wall Street’s expectations. The company noted a slight acceleration from the previous quarter and anticipates increased momentum in new workloads, especially in generative artificial intelligence (AI) products like “Q,” an AI chatbot for businesses.
Jassy highlighted the potential of generative AI services, stating that although they currently constitute a “relatively small” business, they could contribute “tens of billions of dollars” in revenue within the next several years.
Amazon’s advertising unit, a profitable segment for the company, witnessed a 27% year-over-year sales growth, reaching $14.7 billion. The recent introduction of ads on Prime Video content is expected to generate substantial revenue, with Amazon maintaining a commitment to keeping ad loads low.
As Amazon continues to navigate a dynamic business landscape, Jassy’s strategic decisions and the company’s resilience in adapting to market demands position it for sustained growth in 2024. The positive reception from investors, evident in the stock’s significant after-hours climb, underscores confidence in Amazon’s financial strength and strategic vision.