Amazon Stock, in its fourth-quarter earnings report on Thursday, exceeded analysts’ expectations, causing its stock to surge over 8% in after-hours trading. The key figures from the report include earnings per share (EPS) of $1.00, surpassing the expected 80 cents, and revenue of $170 billion, beating the estimated $166.2 billion.
Other notable figures in the report include Amazon Web Services (AWS) revenue at $24.2 billion, matching expectations, and advertising revenue at $14.7 billion, exceeding the anticipated $14.2 billion.
The company’s Q1 sales guidance ranges between $138 billion and $143.5 billion, reflecting an 8% to 13% growth. Analysts had anticipated revenue of $142.1 billion for the first quarter.
Amazon credited CEO Andy Jassy’s efforts to control costs for the impressive earnings. The company reported a significant increase in net income, reaching $10.6 billion or $1.00 per share, compared to $278 million or 3 cents per share the previous year. Amazon achieved this improvement by laying off 27,000 employees and discontinuing unprofitable ventures.
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Amazon CFO Brian Olsavsky emphasized the company’s cautious approach to new investments in 2024 but noted that it doesn’t see the year as focused solely on efficiency. Olsavsky mentioned that Amazon will continue to invest in areas resonating with customers while seeking efficiencies in existing operations.
The fourth-quarter results reflected a 14% increase in revenue, reaching $170 billion, driven by a robust holiday shopping season and the success of Amazon’s October Prime Day event.
Sales at AWS, a crucial part of Amazon’s business, grew 13% to $24.2 billion in the fourth quarter, showing a slight improvement from the previous quarter. Despite a slowdown in AWS growth over the past year, Amazon sees potential in generative artificial intelligence (AI) services, with products like “Q,” an AI chatbot for businesses.
During a conference call with analysts, Jassy highlighted the potential of generative AI services, anticipating them to contribute “tens of billions of dollars” in revenue in the coming years. Amazon recently introduced a generative AI shopping assistant called Rufus, currently in testing among a subset of U.S. users.
The advertising unit also performed well, with sales growing 27% year over year to $14.7 billion. Amazon began displaying ads on Prime Video content, aiming to generate additional revenue. Olsavsky mentioned strong advertiser enthusiasm while emphasizing the company’s commitment to maintaining low ad loads.
As Amazon enters 2024, Jassy expressed optimism about the company’s trajectory, citing a record-breaking holiday shopping season and a promising start to the new year.
