Following the market closure on Thursday, Amazon.com Inc. (NASDAQ: AMZN) surpassed expectations in its fiscal 2023 fourth-quarter results, driven by substantial revenue growth in the double digits. Additionally, the e-commerce giant provided a robust outlook for the fiscal 2024 first quarter. Amazon’s shares concluded Thursday’s trading at $159.28, marking a $4.08 increase (2.63%) from the previous close. In after-hours trading, the stock exhibited further growth, reaching $170.60, a gain of $11.32 (7.11%), as of preparing this report.
The Seattle, Washington-based company reported fourth-quarter revenues of $169.96 billion, an increase of 13.90% from $149.20 billion in the similar quarter of fiscal 2023.
In the last quarter of 2023, concluding on December 31st, Amazon reported a substantial net income of $10.62 billion, equivalent to $1 per share. This marked a notable increase from the fourth quarter of 2022 when the net income was $278 million, or $0.03 per share. It’s worth highlighting that the 4Q 2023 net income figure encompasses a valuation loss of $0.1 billion attributed to the investment in Rivian Automotive, Inc. This contrasts with the previous year’s fourth quarter, where the valuation loss from the Rivian investment amounted to $2.3 billion.
Analysts surveyed by LSEG had anticipated Amazon to record earnings of $0.80 per share on revenues of $166.20 billion.
Commenting on the results, Andy Jassy, Amazon CEO, stated “This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon.”
Segment wise:
- Net product sales rose by 8.75% y-o-y to $76.70 billion.
- Net service sales were $93.26 billion, up 18.54%y-o-y from last year. Specifically, advertising revenues increased by 27% y-o-y to $14.70 billion and surpassed StreetAccount estimates of $14.20 billion.
Furthermore:
- North America revenues surged 13% y-o-y to $105.51 billion.
- International revenues were $40.24, an increase of 16.80% on a y-o-y basis.
- Amazon Web Services (AWS) revenues grew by 13% y-o-y to $24.20 billion and met StreetAccount estimates. In the previous quarter, AWS posted revenue growth of 12%. However, in 4Q 2022, AWS revenues jumped 20% on a y-o-y basis.
In December, Amazon started displaying ads on Prime Video content, an initiative that analysts believe will generate considerable new revenue for the company. Between the end of 2022 and mid-2023, Amazon terminated 27,000 employees in an attempt to improve its performance.
Moving forward, Amazon anticipates first-quarter revenues for 2024 to fall within the bracket of $138 billion to $143.50 billion, indicating a growth range of 8% to 13%. This forward-looking projection aligns with the company’s ongoing trajectory of robust financial performance. In comparison, industry analysts surveyed on Wall Street foresee Amazon’s revenues for the same period to reach approximately $142.13 billion, reflecting the consensus expectation within the financial community. This outlook underscores Amazon’s strategic positioning and its commitment to sustaining a positive growth trajectory in the upcoming quarter.
The upbeat quarterly results are expected to keep Amazon’s stock in an uptrend in the near term.
The historical price chart indicates that the stock of Amazon is ascending after testing support at $155. The next resistance is anticipated to be only near $185. Additionally, the stock is trading above its 50-day moving average, while the Chaikin Money Flow indicator is showing a reading above 50. Therefore, we anticipate the stock price of Amazon to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
