USA -based e-commerce giant Amazon posted its Q4 2018 earnings on Thursday, revealing that the company's net sales totaled $72.4 billion Dollars (roughly $90.07 billion CAD) for the quarter that ended on December 31st, 2018.
Amazon stock fell nearly 50 points from its closing price of $1,718 on fears of reduced margins from sales in India and increased shipping costs in the US.
The company forecast net sales of between US$56-billion and US$60-billion for the first quarter, missing the analyst average estimate of US$60.77-billion, according to IBES data from Refinitiv.
Revenue of $72.4bn was up 20 per cent from last year's $60.5bn Q4 haul, beating financial analysts' expectations by $500m. But Amazon's revenue guidance for the current quarter fell short of expectations.
Amazon Web Services - Amazon's cloud hosting platform that powers a significant chunk of the public internet - generated $7.430 billion Dollars (roughly $9.75 billion CAD) in Q4 2018.
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This time previous year, sales were $5.1bn and operating income was $1.35bn.
More customers signed up for Prime worldwide in 2018 than ever before. That's $1.7 billion more than the 2017 holiday quarter, a 23 percent increase. Net income was $6.04 per share, compared with an average estimate of $5.56. Those profits also help fuel Amazon's growing devices business, which includes smart-home and connected-car gadgets that operate on Amazon's voice-activated Alexa platform. And advertising continued to be one of the brightest spots for the company, with $3.4 billion posted in its "other" category, which is mostly attributed to ad sales, marking an increase of 95 percent year over year.
Shares were down slightly in after-hours trading.
Nicholas Hyett, analyst at Hargreaves Lansdown, said the online retailer was "tightening its grip" on its customers with add-on services such as Amazon Prime which offer free delivery and other benefits. Its market cap, more than $840bn as of Thursday afternoon, is the largest of any publicly traded company in the world. In-store pickups of online grocery orders don't count as physical store sales, further clouding the ability to track the performance of Amazon's grocery push.
Bezos pointed to the Amazon-branded Echo speakers that are at the heart of the new strategy.
Making Amazon more profitable still are ad sales.