Amazon Fourth-Quarter Revenue Rises to $60.5B, Beats Analyst Expectations

Source: The Hollywood Reporter:

February 2, 2018 at 08:43

The e-commerce giant increased net sales during the all-important holiday season, sending shares up sharply in after-hours trading

Amazon grew sales during the all-important holiday season, leading to a fourth-quarter earnings and revenue beat.
The e-commerce giant on Thursday reported net income at $3.75 per share, against a year-earlier $1.54 per share. Analysts had forecast an earnings per-share of $1.85. But the fourth quarter of 2017 was not directly comparable as it includes a provisional tax benefit for the impact of recently introduced U.S. tax cuts at around $789 million.

Revenue for the fourth quarter, which includes sales from Whole Foods, jumped 38 percent to $60.5 billion. That beat an analyst estimate of $59.83 billion.

Stock in Amazon rose by $78, nearly 6 percent, to $1,468 in after-hours trading. AWS, Amazon's cloud computing operation that has been underpinning profits for the company for a number of quarters, saw sales rise to $5.1 billion, against a year-earlier $3.53 billion, and just beat an analyst estimate of $5 billion.

Amazon also said more new paid members joined its Amazon Prime Video in 2017 than in any previous year, both worldwide and domestically. The company also said NFL Thursday Night Football's 11 games on Amazon Prime saw a total of 18.4 million views.

Amazon CFO Brian Olsavsky, during a conference call with analysts, touted the consumer adoption of the online giant's voice-controlled Alexa AI assistant technology, while adding that Fire TV Stick and Echo Dot were among the best-selling products in 2017 across the company's divisions.

"We do like the results we're seeing," Olsavsky told analysts about demand for Amazon content and devices. "We're very happy with the results of customer adoption, the devices sales that we’re seeing and general customer acceptance [of Alexa]," he added. Olsavsky also told analysts that Amazon's advertising business has been a "key contributor" to North American revenue growth.

The e-commerce giant's fourth-quarter earnings release came amid turmoil at its Los Angeles-based outpost, Amazon Studios, after the exit of chief Roy Price in October amid sexual harassment allegations. COO Albert Cheng is leading the group on an interim basis as Jeff Bezos searches for a new exec.

Head of comedy and drama Joe Lewis and unscripted head Conrad Riggs also departed. Meanwhile, international chief Morgan Wandell and head of children's programming Tara Sorensen both jumped to Apple.

Despite the turnover, Amazon has found a breakout in The Marvelous Mrs. Maisel from Amy Sherman-Palladino and Daniel Palladino; the comedy series nabbed two Golden Globes in January.

Meanwhile, Bezos is on the hunt for a second headquarters that will complement its existing Seattle base. Amazon has narrowed the list of contenders down to 20 cities, and expects to make a selection this year.

Feb. 1, 3 p.m. Updated with comments by senior Amazon execs during an analyst call.