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Amazon (AMZN) earnings Q4 2022


Amazon on Thursday issued first-quarter guidance that got here 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. Listed below are the important thing numbers:

  • Earnings: 3 cents per share
  • Revenue: $149.2 billion vs $145.42 billion expected, based on Refinitiv estimates

Here’s how other key Amazon segments did in the course of the quarter:

  • Amazon Web Services: $21.4 billion vs $21.87 billion expected, based on StreetAccount
  • Promoting: $11.56 billion vs $11.38 billion expected, based on StreetAccount

It isn’t immediately clear if the reported earnings are comparable to the Refinitiv analyst estimate of 18 cents per share.

Amazon closed out its slowest yr of growth in its quarter century as a public company. Revenue for the yr 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 of between $121 billion and $126 billion, representing year-over-year growth of 4% to eight%. Analysts were expecting sales to are available at $125.1 billion, based on Refinitiv.

Amazon’s report, together with earnings from Apple and Alphabet, wrap up a mixed earnings season for the mega-cap tech firms.

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% yr over yr. The corporate has been contending with slowing sales as rising gas and food prices forced consumers to tug back discretionary spending. The pandemic-fueled e-commerce boom has also fizzled with consumers increasingly returning to physical retailers.

CEO Andy Jassy, who succeeded founder Jeff Bezos on the helm in July 2021, has spent the past yr working to reel in costs. In January, Amazon said it’s eliminating 18,000 jobs amongst its corporate workforce, after cutting quite a few employees in November. The corporate 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 made a surprise appearance on the corporate’s earnings call, telling analysts that he desired to offer his thoughts after wrapping up his first full yr on the helm. His predecessor, Bezos, stopped participating in earnings calls in 2009, based on The Wall Street Journal.

“We’re working really hard to streamline our costs and attempting to accomplish that at the identical time that we do not surrender on the long-term strategic investments that we imagine can meaningfully change broad customer experiences and alter Amazon over the long run,” Jassy said on the decision.

Jassy said in a press release that the corporate is “encouraged by the continued progress” it’s making in lowering retail costs.

“Within the short term, we face an uncertain economy, but we remain quite optimistic concerning 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% within the period, down from 27.5% within the third quarter.

Promoting revenue jumped 19% from a yr earlier (23% excluding changes in foreign exchange rates), again outpacing online ad firms like Google, Facebook and Snap. Amazon has emerged recently as one among the leaders in digital promoting by giving brands and sellers more ways to pay to advertise their goods across the corporate’s website, apps and media properties.

Operating income within the quarter got here in at $2.7 billion, down from $3.5 billion a yr ago. The fourth-quarter figure includes about $2.7 billion of charges, of which $640 million got here from severance costs related to the layoffs, the corporate said.

Correction: A previous version of this story had the flawed figure for EPS.

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