Amazon Posts Big Q4 Earnings Beat, Weak Q1 Sales Guidance (NASDAQ:AMZN)

Amazon Posts Big Q4 Earnings Beat, Weak Q1 Sales Guidance (NASDAQ:AMZN)

Those profits also help fuel Amazon's growing devices business, which includes smart-home and connected-car gadgets that operate on Amazon's voice-activated Alexa platform.

According to a January 31st, 2019 media release, Amazon net sales increased by 20 percent compared to Q4 2017.

An investigation by the Mirror found that Amazon UK Services had paid £61.7 million corporation tax in the UK in the last 20 years. Operating income was $2.18 billion, also beating analysts' estimates of $2.09bn. Sales at the division rose to $7.43 billion from $5.11 billion a year ago, topping analysts' estimates. Operating expenses grew 18 per cent in the recent quarter.

Amazon's "other" business segment - consisting mainly of its fast-growing advertising business - generated almost $3.8 billion in sales in the quarter, up 97 percent. Google parent Alphabet will be the last FAANG stock to report fourth-quarter results on Monday, February 4. "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". This is still an improvement from the year-ago quarter when revenue was $18bn and loss was $919m. It's harder to keep growing fast with quarterly sales that stretch to 11 digits.

Shares of Amazon are up around 17% over the past year.

Earnings per share were $20.14, up a lot from $6.15 previous year. The catch is that it took Amazon North America $141.4 billion of sales for that operating income and AWS needed $25.65 billion. Revenues of $141.4bn were up 33 per cent from $106.1bn a year ago.

In the fourth quarter, overall losses from global operations widened to $642 million, reversing a trend of improving profitability. Last year, worldwide revenues were $54.3bn and operating loss was $3.1bn.

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Strength in online sales over the holiday period showed Amazon still has room to grow in its core business and is benefiting from excitement around its new devices, said Ron Josey, an analyst at JMP Securities.

Yet, investors turned their attention overseas where Amazon has long lost money in the hopes of future profit.

There's always some fly in the ointment, of course.

"At some point, they're going to have to look for more sales opportunities outside of traditional retail, otherwise the law of large numbers is going to have a greater impact on future sales growth", said Tom Forte, managing director and senior research analyst at D.A. Davidson. Inc. shares dropped after the e-commerce giant gave a tepid first-quarter sales forecast and raised concerns about rising costs, slowing retail growth and a murky outlook for its business in India.

Amazon's net income in Q4 came to $3 billion, or $6.04 per diluted share, compared with net income of $1.9 billion, or $3.75 per diluted share, in the fourth quarter of 2017. There's no pleasing some people.

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