Amazon rises nearly $2 billion in profit on holiday season

Amazon reported a 38.2 percent rise in fourth-quarter revenue on Thursday, more than double the $1.85 that analysts surveyed by Yahoo Finance were estimating,  all taken by a surge in online shopping during the holiday season and strong demand for its cloud services.

Amazon, which shipped over 5 billion items worldwide through its subscription-based Prime service in 2017, said its net sales rose to $60.45 billion in the reported quarter from $43.74 billion a year earlier.

Net income was $1.9 billion for the quarter in the quarter ended Dec. 31 from $749 million. That figure includes a $789m, or $1.59 per share, penalty as a result of the US Tax Cuts and Jobs Act of 2017: the biz has a lot of dosh offshore, and this law allows it to bring that money back to America with a reduced levy on the overseas profit. Amazon also benefited from favourable foreign exchange rate changes over the year, amounting to a $1.1bn windfall.

Revenue from Amazon Web Services, the company’s fast-growing cloud services business, surged 44.6 percent to $5.11 billion, beating the average estimate of $5 billion.

The stock ticked up 3% in initial after-hours trading.

Amazon has a market cap of $677 billion and recently reached record highs.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them. We don’t see positive surprises of this magnitude very often — expect us to double down,” said Jeff Bezos, Amazon founder and CEO, in a statement.

“We’ve reached an important point where other companies and developers are accelerating adoption of Alexa,” said Bezos. “There are now over 30,000 skills from outside developers, customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa, and we’re seeing strong response to our new far-field voice kit for manufacturers.”

The e-commerce said it sold “tens of millions” of Echo devices – which house the Alexa software – last year.

Coincidentally, research firm Canalys on Thursday said it expects “smart speakers” (the Echo family of products, Google Home, Apple HomePod, and the like) to be the fastest growing consumer tech product line in 2018, reaching 50 million units shipped. It estimates that Amazon sold about 21 million such devices in 2017.

On a conference call for investors, chief financial officer Brian Olsavsky attributed the successful quarter to the company’s deft handling of record order volume as well as to growth in advertising revenue.

“We want customers to be able to see new brands and have an easier time discovering new products they’re looking for,” said Olsavsky. “…We’re working with advertisers to all types and sizes to help them reach out customer base.”

by Israt Yasmin, The Blogging Connection

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