Amazon.com (NASDAQ:AMZN) reported robust Q4 2023 earnings of $1.00 per share, a significant increase from the 3 cents per share recorded in the same quarter the previous year. The net income, totaling $10.6 billion, included a pretax valuation loss of $0.1 billion associated with its investment in Rivian Automotive.
The adjusted earnings per share stood at $1.01, surpassing the Consensus Estimate by 24.7%. Net sales for the quarter reached $169.96 billion, reflecting a 14% year-over-year increase. This figure exceeded both management’s guided range of $160-$167 billion and the Consensus Estimate of $166.26 billion. The impact of favorable fluctuations in foreign exchange rates contributed $1.3 billion to the net sales.
Key drivers of Amazon’s performance included strong momentum in North America and International segments, record-breaking sales during the holiday season, and the positive contribution of Amazon Web Services (AWS) and the advertising business. The company’s shares surged by 6.3% in pre-market trading, reflecting the positive market response to Amazon’s better-than-expected results.
Product sales accounted for 45.1% of total sales, increasing by 8.8% year over year to $76.7 billion, while service sales, representing 54.9% of sales, rose 18.5% to $93.3 billion. By segment, North America revenues increased by 13% to $105.51 billion, International revenues rose 17% to $40.24 billion, and AWS revenues grew 13% to $24.2 billion.
Despite exceeding expectations in various segments, the physical store sales saw a year-over-year growth of 4%, amounting to $5.15 billion, falling short of the consensus estimate. The online store sales reached $70.54 billion, up 9% year over year.
Operating expenses totaled $156.8 billion, a 7% increase from the year-ago quarter. Operating income was $13.21 billion, a significant improvement from $2.74 billion in the same quarter last year. AWS reported an operating income of $7.2 billion, marking a 37.7% year-over-year increase.
Amazon’s balance sheet showed increased cash and cash equivalents, totaling $73.4 billion as of December 31, 2023, up from $49 billion as of September 30, 2023. Marketable securities were $13.4 billion, and long-term debt was $58.3 billion.
Looking ahead, Amazon expects net sales between $138 billion and $143.5 billion for Q1 2024, with anticipated operating income between $8 billion and $12 billion. The company’s strong global presence, growing Prime momentum, and various business segments’ positive contributions position it for continued financial success.
Featured Image: Unsplash @ Christian Wiediger
Author Stephanie Bédard-Châteauneuf