Amazon wage hike pays off as it reveals record profits

Amazon wage hike pays off as it reveals record profits

Amazon wage hike pays off as it reveals record profits

Amazon's global biz continues to be a drag on finances, the unit shifted $20.1bn in sales, up 12 per cent, but turned a $642m loss for the quarter.

Shares of the company fell 1.1 per cent to US$1,700 in trading after the bell. Analysts projected $71.9 billion.

Shoppers will spend $484 billion globally on Amazon this year, up 26 percent from 2018, and the Seattle-based company will capture more than half of all online spending in the USA, according to EMarketer Inc.

For the full 2018 fiscal year, Amazon reported a net sales increase of 31 percent to $232.9 billion, up from $177.9 billion in 2017.

Analyst Patrick Moorhead, founder of Moor Insights & Strategy, said in a statement that he attributes AWS's growth rate to "its increased flexibility through "elastic" capabilities as well as increased variability across EC compute capabilities".

Investor excitement about Amazon's growing profits helped push the stock to a record high in September, before the shares dipped during a broader market slump at year's end.

AWS revenues were $7.43bn on the quarter, up 46 per cent year-on-year, while operating income for the cloud biz was $2.2bn, up 63 per cent.

The $7.4 billion in cloud revenue for the quarter ending December 31 marked year-over-year growth of 45 percent at AWS-$130 million more than analysts had predicted.

Net income increased to $3.0 billion, or $6.04 per diluted share, compared with net income of $1.9 billion, or $3.75 per diluted share, previous year and easily topping Street estimates of $5.65 a share. Operating expenses grew 18 per cent in the recent quarter.

Advertising was a key moneymaker, highlighting Amazon's ability to charge brands and merchants for visibility to its 100 million-plus loyal Prime subscribers, who pay fees in exchange for delivery discounts, movie and music streaming and other perks.

Amazon shares have risen 14 percent since the beginning of the year, while the Standard & Poor's 500 stock index has increased almost 8 percent and the Nasdaq composite has risen 9.7 percent.

Amazon's net income in Q4 came to $3 billion, or $6.04 per diluted share, compared with net income of $1.9 billion, or $3.75 per diluted share, in the fourth quarter of 2017.

Market capitalization. Grew to $840 billion Thursday afternoon, more than Microsoft, Apple, or any other publicly traded company.

Amazon also has been growing its sales from physical stores, including its recently acquired Whole Foods grocery chain. The cost of stowing, packing and delivering goods increased 12 percent in the holiday quarter to $10 billion, in line with online sales growth of 12.5 percent.

"In a lot of ways, 2018 was about banking the efficiencies of investments in people, warehouses, infrastructure that we had put in place in 2016 and '17", Olsavsky said. The stock closed Thursday at $1,718.73, up 2.8 percent.

Bezos, the world's wealthiest man and Amazon's biggest shareholder, announced earlier this month that he was divorcing MacKenzie, his wife of 25 years.

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