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Amazon’s Earnings Beat

Last updated on February 14, 2024

Amazon’s recent earnings report for the fourth quarter of 2023 showcased a robust financial performance, reflecting the company’s diverse range of services and global reach. The e-commerce giant reported a substantial increase in net sales, which rose by 14% to $170.0 billion, compared to $149.2 billion in the same quarter of the previous year. This growth was slightly affected by foreign exchange rates, but even excluding this factor, net sales saw a 13% increase.

One notable aspect of Amazon’s performance was the earnings per share (EPS) of $1.00, which exceeded the consensus estimate of $0.81 by $0.19. This indicates a strong profitability for the period. The company’s total revenue for the quarter was reported at $169.96 billion, again surpassing analyst estimates of $165.96 billion. This increase in quarterly revenue was marked at 13.9% compared to the same quarter last year.

In terms of its operations, Amazon expanded its services in various areas. This included the integration of healthcare services into its Prime membership, enhancements in Amazon Fresh grocery delivery, the expansion of its Prime Air drone deliveries, and significant growth in viewership for its Prime Video content. The company also made strides in expanding its Amazon Web Services (AWS) infrastructure, with notable partnerships and commitments to enhance its cloud services.

The income statement of Amazon revealed a gross profit of $93.805 billion, with a net income for common stockholders amounting to $30.425 billion. This was a significant improvement over the previous year, indicating a healthy financial position for the company.

In summary, Amazon’s recent earnings report underscores its continued growth and diversification in various sectors. The company’s ability to exceed financial expectations, especially in terms of EPS and revenue, demonstrates its strong market position and operational efficiency.

Significant Terms:
Net Sales: The total revenue generated from the sale of goods or services, excluding returns, allowances, and discounts.
Earnings Per Share (EPS): A measure of a company’s profitability, calculated as the net income divided by the number of outstanding shares of its common stock.
Gross Profit: The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.
Net Income: The total profit of a company after all expenses and taxes have been deducted from revenue.
Foreign Exchange Rates: The value of one currency for the purpose of conversion to another, which can affect multinational companies’ revenues and profits when converted to their home currency.

Significant terms:

  • Net Sales: Total revenue generated from goods or services sold, excluding returns and discounts.
  • Earnings Per Share (EPS): Profitability measure, calculated as net income divided by outstanding shares.
  • Gross Profit: Profit after subtracting costs of goods sold from revenue.
  • Net Income: Total profit after deducting all expenses and taxes from revenue.
  • Foreign Exchange Rates: Value of one currency relative to another, impacting multinational companies’ revenues and profits.
  • Analyst Estimates: Predictions made by financial analysts regarding a company’s performance.
  • Amazon Web Services (AWS): Amazon’s cloud computing platform offering various services.
  • Operational Efficiency: Ability to utilize resources effectively in business operations.
  • Market Position: Company’s standing relative to competitors in the industry.

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