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Amazon posts record profits in Q4

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The company's largest quarterly net income in its history

SEATTLE — Amazon.com Inc on Thursday reported a profit of nearly $2 billion for the fourth quarter ended December 31. The $1.9 billion in net income was the largest quarterly profit in the company’s history, and compares to a net income of $749 million, or $1.54 per diluted share, in the fourth quarter of 2016. Amazon notes that the fourth quarter 2017 includes a provisional tax benefit of about $789 million associated with the impact of the U.S. Tax Cuts and Jobs Act of 2017.

Net sales increased 38% to $60.5 billion in the fourth quarter, compared with $43.7 billion in fourth quarter 2016. Excluding the $1.1 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 36% compared with fourth quarter 2016.

For the full year, net sales increased 31% to $177.9 billion, according to the company, compared with $136.0 billion in 2016. Excluding the $210 million favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 31% compared with 2016. Operating income decreased 2% to $4.1 billion, compared with operating income of $4.2 billion in 2016. Net income was $3.0 billion, or $6.15 per diluted share, compared with net income of $2.4 billion, or $4.90 per diluted share, in 2016.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” said Amazon founder and chief executive officer Jeff Bezos. “We don’t see positive surprises of this magnitude very often — expect us to double down. We’ve reached an important point where other companies and developers are accelerating adoption of Alexa. There are now over 30,000 skills from outside developers, customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa, and we’re seeing strong response to our new far-field voice kit for manufacturers. Much more to come and a huge thank you to our customers and partners.”

Looking ahead to the first quarter of 2018, Amazon said that its net sales are expected to be between $47.75 billion and $50.75 billion, which would represent an increase of between 34% and 42% compared with first quarter 2017. This guidance anticipates a favorable impact of approximately $1.2 billion (or 330 basis points) from foreign exchange rates, the company said. Operating income is expected to be between $300 million and $1.0 billion in the first quarter of 2018, compared with $1.0 billion in first quarter 2017. The company noted that its guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.

 


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