Amazon Revenue Surges 38% As Q4 Numbers Blow Past Estimates

Ashley Carr
February 3, 2018

On a consolidated basis (including global, North America and Amazon Web Services), Amazon registered profits at almost Dollars 2 billion in the said quarter compared to USD 749 million in the year-ago period.

Net income benefited by approximately $789 million from the recent US tax reform legislation that lowered the USA statutory corporate tax rate to 21% from 35%. Analysts expected $1.85 per share in profit and $59.8 billion in revenue, according to Yahoo Finance. AWS' revenue jumped 44.6% to $5.11 billion in the quarter, beating estimates of $5 billion.

This rise in cloud revenue was bolstered by the likes of Symantec selecting AWS to be its infrastructure provider, along with other major firms such as games publisher Ubisoft, connected products manufacturer Honeywell, National Football League (NFL), and financial services heavy-hitter Capital One. (AMZN) expects revenue to be between $47.75 billion and $60.75 billion. "We don't see positive surprises of this magnitude very often - expect us to double down", said Jeff Bezos, Amazon founder and CEO. Bezos had $116.4 billion on the index at the close of trading Thursday and the projected gain will more than wipe out his $4.9 billion loss that day.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. And excluding the contribution from Whole Foods - which the company acquired in the third quarter of 2017 - and the effect of currency, Amazon's revenue grew 25% year over year.

The operating margins at Amazon Web Services, the company's most profitable business unit, also expanded 1 percentage point from the previous quarter. He noted there are now more than 30,000 skills from outside developers that work with Alexa, allowing consumers to control more than 4,000 smart home devices from 1,200 unique brands.

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Amazon has repeatedly said that India was one of its fastest-growing markets and that it would continue to invest in India. Sales within the division soared 45% YOY, notching US$1.3 billion in operating income. "And there is Whole Foods, where some progress has been made - but which has yet to feel the full force of Amazon's innovative approach".

However, net sales in the segment grew to Dollars 18.03 billion in the fourth quarter, from USD 13.96 billion a year ago. AWS had 2017 operating income of $4.33 billion on sales of $17.46 billion. According to media reports in October 2017, Prime's membership in India had grown nearly five times since the beginning of the year.

Net sales also hit a record $60.5 billion (£42.5 billion) - a 38 per cent uptick - boosted by the acquisition of the Whole Foods grocery retailer past year, which added $4.5 billion (£3.1 billion) to its top line.

He also said that the company's Prime membership service has been a huge success in the country with an adoption rate that even surpassed that of the US.

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