April 19, 2024
Why Amazon Stock Was Rising Today  The Motley Fool


shares of Amazon (AMZN 7.29%) were rising today after the tech giant reported strong fourth-quarter earnings after hours that beat estimates at the top and bottom lines, as profit margins expanded in the quarter and results were solid across the board. Were.

As of 10:18 a.m. ET, the stock was up 6.8% on the news.

A person packing Amazon boxes at a fulfillment center.

Image Source: Getty Images.

Amazon makes profits

Revenue in the quarter, which included the holiday season, rose 14% to $170 billion, beating estimates of $166.2 billion, driven by solid growth in all three of its business segments.

North American sales increased 13% to $105.5 billion, international segment sales increased 17% to $40.2 billion, and Amazon Web Services (AWS) sales increased 13% to $24.2 billion, a modest sequential improvement.

Profits across all three segments also grew significantly as its higher-margin businesses outpaced total revenues. In North America, a $200 million loss in the year-ago quarter turned into $6.5 billion, driven by a 27% increase in advertising to $14.7 billion and a 20% increase in third-party vendor services to $43.6 billion. Went.

In the international region, its operating loss decreased from $2.2 billion to $0.4 billion, and AWS’s operating income increased from $5.2 billion to $7.2 billion.

Overall, operating income rose from $2.7 billion to $13.2 billion, and it reported earnings per share of $1.00, up from $0.03 in EPS a year ago and better than the estimate of $0.80.

CEO Andy Jassy noted that delivery speed and costs have improved, saying, “The regionalization of our US fulfillment network has made our delivery speeds for Prime members the fastest we’ve ever seen, while also lowering our cost of service.” Has occurred.”

Is Amazon a buy?

Looking ahead, Amazon expects net sales of $138 billion-$143.5 billion, up 8%-13% compared to the consensus of $142.1 billion, and reported revenue of $8 billion compared to $4.8 billion in the first quarter. Operating income is estimated at $12 billion. Of 2023.

Amazon is proving that it’s capable of delivering solid top-line growth despite its sheer size, and its operating margins should continue to expand as its growth comes from its high-margin businesses like third-party marketplaces, advertising, and AWS. It is operated by.

If this pattern continues, the stock should continue to rise.

John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of The Motley Fool’s board of directors. Jeremy Bowman holds positions at Amazon. The Motley Fool has posts on Amazon and recommends it. The Motley Fool has a disclosure policy.

Source: www.fool.com

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