Amazon beats on fourth-quarter revenue but provides light guidance

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Andy Jassy, CEO of Amazon and then CEO of Amazon Web Services, speaks at the WSJD Live conference in Laguna Beach, California, October 25, 2016.

Mike Blake | Reuters

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.

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

Here’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 the company’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.

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.

Correction: A prior version of this story had the wrong figure for EPS.

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