Amazon shares dip after hours on weaker-than-expected cloud revenue
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By Liz Moyer and Scott Kanowsky
Investing.com -- Amazon.com Inc (NASDAQ:AMZN) beat revenue expectations for the fourth quarter but top-line results from its key cloud business, Amazon Web Services, were slightly weaker than expected.
Shares of the e-commerce giant fell 6% in after-hours trading.
Revenue of $149.2 billion was 8.5% higher than the fourth quarter of 2021 and above the $145.7B expected by analysts. Meanwhile, AWS - a major profit driver for Amazon - generated $21.4B, up 20% from the year-earlier quarter but slightly less than the $21.9B expected.
“Our relentless focus on providing the broadest selection, exceptional value, and fast delivery drove customer demand in our Stores business during the fourth quarter that exceeded our expectations—and we’re appreciative of all our customers who turned to Amazon this past holiday season,” said Andy Jassy, Amazon CEO, in a statement.
However, Jassy flagged that the company faced an uncertain economy in the short term. Analysts at Jefferies said Amazon's outlook for current-quarter operating income - seen at between $0 and $4.0 billion - "suggests continued cost headwinds."
For the first quarter of 2023, Amazon said net sales are expected to be between $121B and $126B, or to grow between 4% and 8% compared with the first quarter of 2022. Analysts had projected first-quarter sales of $125B.
Amazon highlighted its 2022 holiday season, when customers bought nearly half a billion items from small businesses in the U.S. It said during its biggest Thanksgiving-through-Cyber-Monday holiday shopping weekend ever, small businesses in the U.S. generated more than $1B in sales.
The company reported fourth-quarter earnings per share of 3 cents. Analysts had forecast adjusted earnings per share of 17 cents.
For the full year, Amazon said net sales increased 9%, to $514.0B in 2022.
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Amazon shares dip after hours on weaker-than-expected cloud revenue