Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | Bloomberg | Getty Images
Amazon reported better-than-expected earnings and revenue for the fourth quarter, but it gave disappointing guidance for the current period. The stock slipped in extended trading.
Here are the numbers:
- Earnings: $1.86 vs. $1.49 per share expected
- Revenue: $187.79 billion vs. $187.30 billion expected
Wall Street is also watching several other numbers in the report:
- Amazon Web Services: $28.8 billion vs. $28.8 billion, according to StreetAccount
- Advertising: $17.3 billion vs. $17.4 billion, according to StreetAccount
Amazon said sales this quarter are expected to be between $151 billion and $155.5 billion. Analysts were expecting $158.5 billion, according to LSEG.
“This guidance anticipates an unusually large, unfavorable impact” from foreign exchange rates, the company said. The impact amounts to $2.1 billion, or 1.5%, Amazon said.
The U.S. dollar index — which measures the greenback against a basket of rivals — hit its highest level in more than two years last month, ahead of President Donald Trump’s inauguration. The dollar climbed steadily from late November through mid-January and has since fallen slightly.
Based on Amazon’s forecast, the company only expects revenue growth of 5% to 9% in the first quarter. At the low end of the range, that would mark the slowest growth on record. Amazon went public in 1997.
Revenue in the fourth quarter rose 10% from $170 billion in the same quarter a year earlier.
Sales in Amazon’s cloud division were a hair below consensus estimates, but it’s growing faster than the same quarter last year. Revenue grew 19% during the quarter compared to 13% a year ago. AWS still isn’t growing as quickly as its competitors. Revenue from Azure and other cloud services revenue at Microsoft grew 31%. Alphabet’s cloud revenue was up 30%.
Amazon’s capital expenditures were $27.8 billion during the quarter, compared to $14.6 billion a year ago. The company has been plowing billions into data centers and equipment like Nvidia GPUs to power its artificial intelligence products. The company is responding to increased competition in generative AI from rivals including OpenAI’s ChatGPT, Google’s Gemini and Microsoft’s Copilot, as well as AI startup Anthropic, which counts Amazon among its investors.
Amazon CEO Andy Jassy highlighted the company’s AI investments in the earnings release, including a new set of AI models, called Nova, and its homegrown Trainium chips.
“These benefits are often realized by customers (and the business) several months down the road, but these are substantial enablers in this emerging technology environment and we’re excited to see what customers build,” Jassy said in a statement.
This is breaking news. Please check back for updates.
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