Amazon, AMZN, Earnings, Nasdaq, Supply Chain - Talking Points
- Amazon stock rises in after-hours trading as investors react to Q4 earnings results
- The e-commerce giant posted record revenues of $137.4 billion, pushing earnings per share to $27.75
- Operating income rises to $3.05 bn vs $2.43 bn expected; Prime prices set to increase
Amazon.com, Inc. reported fourth-quarter corporate earnings results this afternoon, posting record sales despite rising costs, sending the share price surging in after-hours trading. Amazon’s stock price rose more than 14% in its initial reaction. The E-commerce and Cloud juggernaut took a beating before the closing bell due to a broad-risk off move, triggered by Facebook’s earnings results on Wednesday.
The superb revenues reflected a robust holiday shopping season, pushing revenue up to $137.4 billion. Earnings per share (EPS) came across at an impressive $27.75, well above $14.09 during Q4’2020, and above the expected $3.77, on a GAAP basis. That beat was driven by an $11.8 billion gain on electric vehicle maker Rivian, which Amazon acquired a stake in recently. The company previously said it would aim to reduce costs in 2022, a challenging task in the current market conditions, but a higher monthly and yearly service charge for Amazon Prime customers is appeasing investors.
Amazon Web Services were up 40% on a year-over-year basis at $17.8 billion in net sales for the segment. The company’s financial statements showed net sales in North America separated from overseas markets for the first time, with $82.4 billion in US sales vs $37.3 billion internationally. Moreover, advertising revenue gained its own spot as a line item, suggesting executives expect to see growth in the space. The rosy move, should it continue on Friday, is likely to drag technology stocks higher. Although the morning US non-farm payrolls report may take precedence.
Outlook
- Sees Q1 net sales at $112.0 bn to $117.0 bm vs expected $120.51 bn
- Sees Q1 operating income at $3.0 bn to $ 6.0 bn vs expected $6.06 bn
- Amazon monthly fee will rise to $14.99 from $12.99
Amazon ($AMZN) - 3-Minute Chart
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--- Written by Thomas Westwater, Analyst for DailyFX.com
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