Amazon’s fourth-quarter sales hit a record $72 billion

Roman Schwartz
February 3, 2019

The online giant's net sales increased 20% to $72.4 billion in the quarter ended Dec.31, compared with $60.5 billion in the year-ago quarter. Amazon increased the price of Prime previous year, and free two-day shipping has become a common offering from other retailers. AWS revenue represented 10% of total quarterly sales at Amazon, but 58% of the company's overall operating income. Notably, when excluding revenue from physical stores (a revenue category that primarily consists of Whole Foods), revenue rose 21% year over year during the quarter.

The company said that for the first quarter of 2019, net sales are expected to fall between US$56 billion and US$60 billion - though some analysts had set their sights on almost $61 billion. For the year, net sales were up 31 per cent to US$232.9 billion, compared to $177.9 billion in 2017.

Amazon's cloud computing division, Amazon Web Services, continues to play a crucial role in the company's performance.

Amazon's widening profits are largely driven by the growth of its high-margin businesses, including its cloud, advertising and third-party seller services.

But guidance for first-quarter revenue was weaker than expected, at $56 billion to $60 billion, below Wall Street expectations of $61 billion. This guidance anticipates an unfavorable impact of approximately 210 basis points from foreign exchange rates.

Amazon's total profit for 2018 is greater than $10 billion.

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Amazon shares have risen 14 percent since the beginning of the year, while the Standard & Poor's 500 stock index has increased almost 8 percent and the Nasdaq composite has risen 9.7 percent.

AWS sales increased 45 percent in the quarter to $7.4 billion and generated almost $2.2 billion in operating income.

Shares in the online giant fell nearly 5% in after-hours trading despite it reporting record sales and profit for the Christmas holiday period. Notably, revenue in North American surged 35% year over year to $34.3 billion, while worldwide revenue grew just 13% to $15.5 billion. Olsavsky also hinted that Amazon's spending will increase in 2019, emphasizing that expenditures in 2018 were light and the company has to keep investing in people and facilities to expand. Amazon had jumped back above Microsoft Corp., which is No. 2 in cloud computing, as the most valuable publicly traded company, with a market capitalization of $840.4 billion.

Amazon has historically delivered relatively little profit as it fulfills Bezos's strategy of investing to stay ahead.

"Amazon will now need to work doubly hard to achieve any future sales gains".

Boxes in an Amazon fulfillment center. The success of Amazon has made Mr Bezos, 55, chief executive, the world's richest...

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