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Amazon Q4 2018 Profits: AWS, retail, advertising, Prime

Amazon's holiday results exceeded Wall Street's expectations, but the Seattle company warned that it could not do the same in the first quarter.

The company beat analysts' earnings and revenue forecasts. Wall Street estimated sales of the technology giant increased almost 20% and its earnings per share (EPS) rose almost 50% in the fourth quarter.

But the e-commerce giant said sales of the first quarter will fall in forecasts by analysts.

Investors seemed to take the report calmly. In the last trading hours following the report, the company's shares were out of $ 3.97, or less than 1%, at $ 1,715.00

Here is what Amazon reported and how it compares to the expectations of Wall Street and the results before the company:

  • Revenue from the fourth quarter (Q4): 72,400 million dollars. Analysts predicted 71.92 million dollars. In the same period of 2017, Amazon posted sales of $ 60.45 million.
  • Q4 EPS: $ 6.05. Wall Street predicted $ 5.55. In the fourth quarter of the previous year, the company earned $ 3.75 per share.
  • First quarter earnings (Q1) (guidance for the company): $ 56 million to $ 60 million. Analysts predicted $ 60.99 million. In the first quarter of last year, Amazon saw sales of 51,054 million dollars.
  • Q1 EPS (orientation): Amazon does not offer specific EPS guidelines, but predicted it would publish operating revenues of between $ 2.3 billion and $ 3.3 billion. Wall Street had a forecast of $ 2.99 million in operating revenues for the quarter and $ 4.43 per share in profit before the report. In the same period of 2018, the company posted $ 1.9 million in operating income and obtained $ 3.27 per share.

The clouds and advertising companies of Amazon boosted their results

The results of Amazon increased again by their business cloud computing. Sales in Amazon's web services jumped 45% from the one-year period up to 7,400 million dollars. The unit posted $ 2.2 million in operating revenues, which were more than two thirds of the company's total profit and amounted to about 61% from the fourth quarter of 2017.

The company also saw strong continuing growth in its advertising business. Amazon's "other" revenues, which consist mainly of advertising sales, reached $ 3,400 million in the quarter, up 95% from the same period last year. Business growth slowed slowly, but from the torrential rate that the company followed in the previous three quarters, when sales grew at least 123% year on year in each period.

News from the company's retail businesses were more mixed. The company's online direct sales grew 13% in the quarter of the same period last year, and its sales through its physical stores – mainly from the Whole Foods chain – dropped 3% year after year.

Meanwhile, its North American business, which mainly consists of its retail sales, also includes its advertising unit and its business of selling goods on behalf of third-party suppliers – grew 18% to 44,100 million dollars. Its international retail business grew 15%.

However, the operating profit of North American Amazon companies grew 33% to $ 2.3 trillion. And the operational loss of its international business, long loser of money, was reduced by 30% to 642 million dollars.

Amazon shares closed regular trading Thursday to $ 48.30, or 2.9%, to $ 1,718.73.

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