It Was A Happy Holiday for Amazon Earnings

 

Amazon reported strong growth in sales and profit for the end of last year as robust holiday spending online helped extend its recovery from a postpandemic slump.

The Wall Street Journal reports the e-commerce giant on Thursday also projected continued strength in the current quarter, thanks in part to interest in artificial intelligence that it said is driving healthy sales in its cloud-computing arm.

Amazon’s results, amid a flurry of other solid financial reports by big tech companies, sent its shares up sharply. Amazon said that profit in the three months through December surged to $10.6 billion, its strongest level in two years—from a meager $278 million in the same quarter the previous year. Revenue rose 14% to $170 billion. Both figures easily beat Wall Street expectations.

Amazon has rebounded from a sharp downturn that followed an explosion of business during the pandemic. It has reorganized its dominant logistics business after a period of instability while also turning its attention to innovations in AI. Strong customer demand during the holiday season benefited the retailer, which also held a special sales event during the fourth quarter that lifted its sales. The Commerce Department recently said U.S. retail sales were strong to end the year.

Sales in the Amazon Web Services cloud-computing arm, a critically important profit center for Amazon, increased 13% in the fourth quarter to $24.2 billion, matching expectations. The division’s operating profit rose nearly 38%.

AWS sales had decelerated last year, after years of rapid expansion. Lower enterprise demand hurt the unit, though Amazon indicated it expected growth to pick up again as businesses responded positively to the company’s latest cloud offerings.

Amazon said its advertising revenue grew 27% in the fourth quarter. The business has become one of Amazon’s strong points in recent years and helped drive profit.

Amazon’s stock rose 7% after hours. Through Thursday’s close, the stock already had nearly doubled from its low point early last year, though it remained about 15% below its record high in 2021.