Amazon Quarterly Earnings

CMC Markets
2 minute read
|29 Jan 2024
Amazon Quarterly Earnings Hero
Table of contents
  • 1.
    Amazon's Fourth Quarter Performance Expectations:
  • 2.
    Amazon Financial Report Calendar:

Amazon's performance in the last quarter was outstanding, with revenue reaching $142.1 billion, a year-on-year increase of 13%, surpassing Wall Street expectations. Online store sales increased by 7% to $57.3 billion; third-party service revenue grew by 20% to $34.3 billion; advertising revenue, influenced by promotional activities, increased by 26% to $12.1 billion; and the revenue of the Amazon Web Services (AWS) cloud computing division grew by 12% to $23.1 billion.

Also in the last quarterly report, Amazon's large-scale layoffs and discontinuing of some low-profit business segment resulted in net income increasing by 243% to $9.9 billion year-on-year, and AWS operating profit increased by 29% to $7 billion. The company's stock price has risen continuously for three months after the financial report release, achieving an 81% increase in 2023, marking its best performance since 2015.

Amazon's Fourth Quarter Performance Expectations:

Amazon's management expects fourth-quarter revenue to be in the range of $160 billion to $167 billion, indicating a year-on-year growth of less than 10%. There is no clear indication from Amazon on whether the AWS business can resume growth in the fourth quarter, and Amazon did not repurchase stocks in the third quarter. The recent rise in the stock price reflects investors' expectations for fourth-quarter sales growth. Amazon stated that during the holiday shopping period from November 17 to November 27 2023, consumers purchased over a billion items, although specific numbers are yet to be disclosed.

Investors will likely focus on the specific details of holiday sales this time. Amazon's e-commerce business recovery and the high-growth, high-profit advertising business are expected to significantly contribute to the company's overall profit. This is due to the resilient economic fundamentals in the U.S. in 2023, particularly with strong consumer spending. While the AWS business segment resumed growth in the third quarter, increasing by only 12%, ending six consecutive quarters of decline, its overall growth rate still lags behind competitors such as Microsoft (+29%) and Google (+22%).

Looking at the guidance for the fourth quarter, expectations seem relatively conservative. Investors may be concerned about the sustainability of the recovery in the e-commerce business and whether the advertising business can maintain high growth. In addition, investors are more focused on whether the AWS business has reached a turning point in growth, achieving growth for two consecutive quarters. Future bullish logic may depend on the development of the artificial intelligence field driving AWS business growth, which, in turn, depends on the macro environment. 

Amazon Financial Report Calendar:

  • Date: February 1st (after-market)

  • Revenue: $166.19 billion, YoY growth of 11.38%
  • Earnings Per Share: $0.79, YoY growth of 276.19%
  • Data Source: Zacks Research


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