Amazon reported better-than-expected earnings and revenue for its fourth quarter, but disappointed investors with weak guidance for the current period. The stock plummeted over 5% in extended trading.
The company’s earnings per share of $1.86 beat expectations of $1.49, while its revenue of $187.79 billion fell short of forecasts of $187.30 billion.
Amazon’s cloud division saw slower-than-expected growth, with sales increasing just 19% compared to the same period last year. This contrasts with rivals like Microsoft and Alphabet, which reported significant growth in their cloud revenue.
The company attributed its weak guidance to unfavorable foreign exchange headwinds, which will impact $2.1 billion in revenue. Amazon expects sales this quarter to be between $151 billion and $155.5 billion, a significant drop from analysts’ expectations of $158.5 billion.
Amazon CEO Andy Jassy emphasized the company’s AI investments, including new models and chips, as key drivers of growth. However, investors are under pressure to demonstrate the return on investment for these big spending initiatives.
Despite this, Amazon’s advertising revenue saw a 18% increase, driven by brands’ continued spending on prominent positioning on its app. The company’s shares have risen 9% year-to-date, outperforming the Nasdaq.
Source: https://www.cnbc.com/2025/02/06/amazon-amzn-q4-earnings-report-2024.html