Amazon Delivers Record Quarterly Revenue, Surpasses Wall Street’s Q4 Earnings Expectations

E-commerce giant brings in $72.4 billion during the holiday quarter

Last Updated: January 31, 2019 @ 1:46 PM

Amazon delivered its best quarterly sales ever when it reported its Q4 financials on Thursday afternoon, surpassing Wall Street revenue and earnings expectations at the same time.

The e-commerce giant reported revenue of $72.4 billion for the three months ending Dec. 31, beating analyst estimates of $71.9 billion. Sales increased 20 percent year-over-year from the $60.5 billion Amazon reported during the fourth quarter of 2017, it’s previous quarterly best in terms of sales. Amazon also posted earnings per share of $6.04, compared with estimates of $5.65 EPS. The company brought in $3 billion in profit during the holiday period.

Amazon shares increased slightly in after-hours trading, moving up about 0.5 percent to $1,726 per share. The reaction to its sales and earnings was likely offset by Amazon offering Q1 revenue guidance of $56 billion to $60 billion, coming in on the low end of analyst expectations of about $61 billion.

“Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year,” Amazon chief Jeff Bezos said in a statement.

He continued: “The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017.”

Amazon’s cloud business, AWS, increased revenue 45 percent year-over-year, bringing in $7.43 billion. For all of 2018, Amazon reported sales of $232.9 billion and brought in $10.1 billion in profit. This was the company’s third straight profitable quarter.  Amazon also reported free cash flow of $8.4 billion at the end of the quarter, compared with -$1.5 billion at the end of Q4 2018.

Amazon, in its earnings release, pointed out it earned 10 Golden Globe nominations and earned two wins this year: Rachel Brosnahan won for best actress in a TV series for her lead role on “The Marvelous Mrs. Maisel,” and ben Whishaw won a best supporting actor in a series or film for his role in “A Very English Scandal.” The company also boasted the number of devices with Alexa voice control doubled in 2018, although it didn’t reveal a hard number for how many devices that actually is.

After reinventing online retail, Amazon has recently turned its attention to physical stores with the opening of several Amazon Go marts and its purchase of Whole Foods. Revenue for its physical stores lagged this quarter, however, dropping 3 percent to $4.4 billion.

After Amazon missed Wall Street Q3 revenue expectations during the third quarter — despite raking in more than $56 billion in sales — the company’s stock dropped 24 percent between late October and mid-December. The dip came as several major tech companies, including Apple, were caught in an overall downturn for the sector. At about $1,715 per share, Amazon’s stock had rebounded in the past several weeks, largely wiping out its losses heading into Thursday.

As Amazon continues its Hollywood push, the company’s entertainment wing went on a buying spree last week at the Sundance Film Festival, including landing the Adam Driver political thriller “The Report” for $14 million and the U.S. rights to the Mindy Kaling-written comedy “Late Night” for $13 million.

Amazon will hold a call to discuss its earnings at 5:30 p.m. ET.

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