Revenue and net income beat analysts' estimates
SEATTLE — Amazon.com Inc. reported strong sales and net earnings gains for the fourth quarter, beating analysts’ estimates. But the company’s forecast for first quarter sales growth fell short of analysts’ projections, and shares fell in early morning trading on Friday.
Net sales increased 20% to $72.4 billion in the fourth quarter ended December 31. Net income grew 63% to $3 billion (or $6.04 per diluted share), including a provisional tax benefit of about $789 million attributed to the effects of the U.S. Tax Cuts and Jobs Act of 2017.
Amazon said the holiday season was a particularly strong one for its Alexa virtual assistant and its Alexa-enabled devices, including the Echo Dot smart speaker.
“Alexa was very busy during her holiday season,” Amazon founder and CEO Jeff Bezos said in a statement. “Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year.”
For the full year, Amazon said that net sales increased 31% to $232.9 billion. (Excluding the $1.3 billion favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 30% compared with 2017). Operating income increased to $12.4 billion, compared with operating income of $4.1 billion in 2017. Net income for the year increased to $10.1 billion, or $20.14 per diluted share, compared with net income of $3.0 billion, or $6.15 per diluted share, in 2017.
For the first quarter of 2019, Amazon projects that net sales will be between $56 billion and $60 billion, which would represent growth of between 10% and 18% compared with first quarter 2018. The company says its projection includes an unfavorable impact of approximately 210 basis points from foreign exchange rates. Operating income is expected to be between $2.3 billion and $3.3 billion, compared with $1.9 billion in first quarter 2018.