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Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | Bloomberg | getty images
Amazon Fourth-quarter results were reported Thursday that beat analysts’ estimates, and gave strong guidance for the current quarter. The stock rose more than 8% in extended trading.
Here are the results:
- earnings per share: $1.00 versus 80 cents expected by LSEG, formerly known as Refinitiv.
- Income: $170.0 billion vs. $166.2 billion expected by LSEG
Wall Street is also tracking several other numbers in the report:
- Amazon Web Services: $24.2 billion vs. $24.2 billion, according to StreetAccount
- advertising: $14.7 billion vs. $14.2 billion, according to StreetAccount
Amazon said first-quarter sales will be between $138 billion and $143.5 billion, representing growth of 8% to 13%. Analysts had expected revenue of $142.1 billion, according to Refinitiv.
Amazon easily topped Wall Street’s earnings expectations, showing that CEO Andy Jassy’s efforts to rein in costs are succeeding. Net income rose to $10.6 billion, or $1.00 a share, from $278 million, or 3 cents a share, a year earlier.
The company laid off 27,000 workers between late 2022 and mid-2023, and liquidated some of its more unproven bets. It has continued to look for ways to reduce expenses in other areas such as its fulfillment business. In January, it announced cutbacks at other units, including Prime Video, MGM Studios and Twitch.
Amazon Chief Financial Officer Brian Olsavsky told reporters Thursday that the company will continue to take a cautious approach on new investments, but that he doesn’t see 2024 as “an efficiency type of year.”
“We’re going to continue to invest in new things and new areas and things that customers love,” Olsavsky said. “Where we can find efficiencies and do more with less, we’re going to do that too.”
Revenue rose 14% to $170 billion in the fourth quarter. The period reflects the results of the holiday shopping season and Amazon’s October Prime Day program, both of which the company said exceeded its expectations.
“This Q4 was a record-breaking holiday shopping season and a strong finish to 2023 for Amazon,” JC said in a statement. “As we enter 2024, our teams are performing rapidly, and we have a lot to be excited about.”
Amazon Web Services sales rose 13% in the fourth quarter to $24.2 billion, in line with Wall Street forecasts. This represents a slight increase compared to the previous quarter, when sales increased 12%, but it is a slowdown compared to the year-ago period, when sales increased 20%.
Over the past year, growth at AWS has slowed as businesses have cut back on their cloud spending. But Olsavsky said the company is seeing those cost optimizations diminish, and new workloads are increasing. He said there has been “a lot of interest” in AWS’s generative artificial intelligence products, such as AI chatbot “Q” for businesses.
Jassi said on a conference call with analysts that generative AI services remain a “relatively small” business, but the company believes they could generate “tens of billions of dollars” in revenue within the next several years .
Ahead of its earnings release on Thursday, Amazon announced a generative AI shopping assistant called Rufus that it is testing among a subset of users in the US.
Sales at Amazon’s profitable advertising unit rose 27% year over year to $14.7 billion. Last month, the company began serving ads on Prime Video content, which analysts project will generate substantial new revenue for the business. Olsavsky said the company has seen “a lot of enthusiasm” from advertisers, but Amazon plans to keep the advertising load low.
