Amazon beats on fourth-quarter revenue but provides light guidance
PUBLISHED THU, FEB 2 202312:01 PM EST
UPDATED 5 MIN AGO
Annie Palmer @ANNIERPALMER
CNBC.com
KEY POINTS
-- Amazon reported fourth-quarter sales on Thursday that beat analysts’ estimates.
-- The e-retailer said revenue in the first quarter will be $121 billion to $126 billion. Analysts were expecting $125.1 billion, according to Refinitiv.
-- Amazon Web Services reported 20% sales growth, which was short of expectations.
Amazon on Thursday issued first-quarter guidance that came in light of estimates, overshadowing better-than-expected revenue for the fourth quarter. The stock slid after hours, erasing most its rally from the regular trading day. Here are the key numbers:
Earnings: 3 cents per share
Revenue: $149.2 billion vs $145.42 billion expected, according to Refinitiv estimatesHere’s how other key Amazon segments did during the quarter:
Amazon Web Services: $21.4 billion vs $21.87 billion expected, according to StreetAccount
Advertising: $11.56 billion vs $11.38 billion expected, according to StreetAccount
It’s not immediately clear if the reported earnings are comparable to the Refinitiv analyst estimate of 18 cents per share.
Amazon closed out its slowest year of growth in its quarter century as a public company. Revenue for the year increased 9% as inflationary pressures and rising rates put a damper on consumer spending. The stock price lost almost half its value in 2022.
The e-retailer said it expects to post first-quarter revenue between $121 billion and $126 billion, representing year-over-year growth of 4% to 8%. Analysts were expecting sales to come in at $125.1 billion, according to Refinitiv.
Amazon’s report, along with earnings from Apple and Alphabet, wrap up a mixed earnings season for the mega-cap tech companies.
Apple reported its first revenue decline since 2016 on Thursday, and Alphabet missed on earnings and revenue. On Wednesday, Facebook parent Meta topped estimates and gave an optimistic outlook on its expenses.
Sales in Amazon’s online stores segment contracted 2% year over year. The company has been contending with slowing sales as rising gas and food prices forced consumers to pull back discretionary spending. The pandemic-fueled e-commerce boom has also fizzled out since shoppers have increasingly returned to brick and mortar retailers.
CEO Andy Jassy, who succeeded founder Jeff Bezos at the helm in July 2021, has spent the past year working to reel in costs. In January, Amazon said it’s eliminating 18,000 jobs among its corporate workforce, after cutting a number of employees last November. The company has also instituted a hiring freeze in its corporate ranks, cut some projects and paused warehouse expansion in an effort to tame rising expenses.
Jassy said in a statement that the company is “encouraged by the continued progress” it’s making in lowering retail costs.
“In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon,” Jassy said.
Amazon’s cloud business — Amazon Web Services — missed estimates for the fourth quarter, reflecting a slowdown in business spending. AWS grew just 20% in the period, down from 27.5% in the third quarter.
Advertising revenue jumped 23% from a year earlier, again outpacing online ad companies like Google, Facebook and Snap. Amazon has emerged recently as one of the leaders in digital advertising by giving brands and sellers more ways to pay to promote their goods across the company’s website, apps and media properties.
Amazon (AMZN) earnings Q4 2022 (cnbc.com) |
