Amazon, the global e-commerce giant, reported impressive fourth-quarter earnings, surpassing expectations.
The company announced earnings per share of $1.00, beating the FactSet Consensus estimate of $0.80. Revenues for the quarter rose by 13.9% year-over-year to $169.96 billion, outperforming the company"s guidance of $160-167 billion. Q4 operating income was reported at $13.2 billion, well above the prior guidance range of $7-11 billion.
One of the key drivers of Amazon's success was its Amazon Web Services (AWS) segment, which saw sales increase by 13.2% year-over-year to $24.2 billion. This growth represents a positive trend compared to previous quarters, with AWS sales increasing by 12% on a constant currency basis in the third quarter and second quarter, and 16% in the first quarter.
Advertising Services segment revenue experienced a significant 26% CC increase, reaching $14.65 billion. This is a step-up from the previous quarters, where growth rates were 25% CC in Q3, 22% CC in Q2, and 23% CC in both Q1 and Q4 of the previous year.
Andy Jassy , Amazon CEO, expressed satisfaction with the company's performance, highlighting the record-breaking holiday shopping season and the continued focus on improving customer experience and innovation across all business segments. Jassy attributed the success to the regionalization of the US fulfillment network, which resulted in faster delivery speeds for Amazon Prime members and reduced costs. Additionally, the continued investment in AWS and the introduction of new genAI capabilities have resonated with customers.
Looking ahead, Amazon provided guidance for the first quarter of 2024. The company expects net sales to range from $138.0 billion to $143.5 billion, representing a growth rate of 8% to 13% compared to the first quarter of 2023. The midpoint is lightly below consensus but
Operating income is projected to be between $8.0 billion and $12.0 billion, compared to $4.8 billion in the same period last year. This guidance reflects Amazon's optimism for continued growth and its ability to capitalize on its expanding customer base and diverse business portfolio.
Shares of AMZN have joined META in rocketing to all-time highs in after hours. Investors will be impressed with the improved bottom line performance as the company sees an improvement from product mix and reaps the benefits of its transport restructuring. The stock is he most expensive mega cap at 43x but the improved metric will allow bulls to argue it is growing into its valuation.
In summary, Amazon delivered strong financial results in the fourth quarter of 2023, surpassing expectations across key metrics such as earnings per share and revenues. The company's AWS and advertising services segments demonstrated solid growth, driving overall performance. With a positive outlook for the first quarter of 2024, Amazon remains well-positioned to capitalize on its strengths and solidify its position as a dominant player in the global e-commerce market.