An Amazon Echo Dot. (AP Photo/Elaine Thompson, File)

An Amazon Echo Dot. (AP Photo/Elaine Thompson, File)

Amazon has huge fourth quarter: Net income was $1.9 billion

Revenue soared 38 percent to $60.5 billion, beating the $59.8 billion analysts expected.

  • By JOSEPH PISANI AP Retail Writer
  • Thursday, February 1, 2018 4:18pm
  • Business

The Washington Post

Amazon.com on Thursday reported the highest quarterly profits in company history, bolstered by strong holiday sales and growing demand for its cloud business.

Fourth-quarter profits — which included earnings from Whole Foods Market — rose to $1.9 billion, or $3.75 per share, up from $749 million, or $1.54 per share, a year earlier. Shares of the company’s stock rose more than 6 percent in after-hours trading following the news. (The stock had fallen 4.2 percent in anticipation of the results, to $1,390 a share.)

The financial report painted a picture of a juggernaut that shows little sign of slowing. Amazon hired nearly 130,000 employees globally in 2017, excluding acquisitions, adding a workforce the size of a small city. The Seattle-based tech giant said it shipped more than 5 billion items last year as part of its Prime subscription program, and that more new members had joined Amazon Prime in 2017 than in any other year, both worldwide and in the United States.

“Amazon generated another blockbuster quarter,” said Charlie O’Shea, lead retail analyst for Moody’s.

The company reported revenue of $60.5 billion during the fourth quarter, up from $43.7 billion a year earlier. Whole Foods Market, which Amazon acquired in August, contributed about $4.5 billion in North American sales.

The company said it had benefited from the new tax law, as well as brisk demand for its Alexa-powered Echo devices.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” said Jeff Bezos, the founder and chief executive of Amazon. “We don’t see positive surprises of this magnitude very often — expect us to double down.” (Bezos also owns The Washington Post.)

Amazon Web Services, the company’s cloud platform, continued to drive profits. That part of the business had a 26 percent operating margin in the most recent quarter, compared to 3.5 percent for the overall company. AWS sales, meanwhile, rose 45 percent to $5.1 billion.

“Growth, growth, and more growth,” O’Shea said in a research note. “AWS will continue to be the engine for Amazon’s profitability, and we expect this to continue until the investment cycle slows.”

The boost in profits came even as the company continued to spend more on marketing and technology. Fulfillment costs, meanwhile, rose 57 percent year-over-year, to $8.97 billion.

Much of Amazon’s flagship business is built on fast — and free — shipping to millions of homes. The company now offers free shipping on more than 100 million items in the United States, according to Chief Financial Officer Brian Olsavsky.

“Shipping cost is always going to be a strong part of our offering, and it’s going to be increasing because of our business model,” Olsavsky said in a Thursday earnings call with Wall Street analysts. “At the same time, we look to be more efficient in that area.”

Earlier in the week, Amazon announced it was teaming up with Berkshire Hathaway and JP Morgan to create an independent health-care company. The companies offered few details but said they would use technology to tackle the ballooning costs of health care for their 1.2 million employees.

“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Bezos said.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Reed Macdonald, magniX CEO. Photo: magniX
Everett-based magniX appoints longtime aerospace exec as new CEO

Reed Macdonald will take the helm at a pivotal time for the company that builds electric motors for airplanes.

People walk along a newly constructed bridge at the Big Four Ice Caves hike along the Mountain Loop Highway in Snohomish County, Washington on Wednesday, July 19, 2023. (Annie Barker / The Herald)
Check out the best tourist attractions in Snohomish County

Here’s a taste of what to do and see in Snohomish County, from shopping to sky diving.

People walk out of the Columbia Clearance Store at Seattle Premium Outlets on Thursday, April 25, 2024 in Quil Ceda Village, Washington. (Olivia Vanni / The Herald)
Head to Tulalip for retail recreation at Seattle Premium Outlets

The outlet mall has over 130 shops. You might even bring home a furry friend.

Brandon Baker, deputy director for the Port of Edmonds, shows off the port's new logo. Credit: Port of Edmonds
A new logo sets sail for the Port of Edmonds

Port officials say after 30 years it was time for a new look

Penny Clark, owner of Travel Time of Everett Inc., at her home office on Tuesday, April 23, 2024 in Arlington, Washington. (Olivia Vanni / The Herald)
In a changing industry, travel agents ‘so busy’ navigating modern travel

While online travel tools are everywhere, travel advisers still prove useful — and popular, says Penny Clark, of Travel Time in Arlington.

Travis Furlanic shows the fluorescent properties of sulfur tuft mushrooms during a Whidbey Wild Mushroom Tour at Tilth Farmers Market on Saturday, April 27, 2024 in Langley, Washington. (Annie Barker / The Herald)
On Whidbey Island, local fungi forager offers educational mushroom tours

Every spring and fall, Travis Furlanic guides groups through county parks. His priority, he said, is education.

ZeroAvia founder and CEO Val Mifthakof, left, shows Gov. Jay Inslee a hydrogen-powered motor during an event at ZeroAvia’s new Everett facility on Wednesday, April 24, 2024, near Paine Field in Everett, Washington. (Ryan Berry / The Herald)
ZeroAvia’s new Everett center ‘a huge step in decarbonizing’ aviation

The British-American company, which is developing hydrogen-electric powered aircraft, expects one day to employ hundreds at the site.

Allan and Frances Peterson, a woodworker and artist respectively, stand in the door of the old horse stable they turned into Milkwood on Sunday, March 31, 2024, in Index, Washington. (Ryan Berry / The Herald)
Old horse stall in Index is mini art gallery in the boonies

Frances and Allan Peterson showcase their art. And where else you can buy a souvenir Index pillow or dish towel?

Everett
Red Robin to pay $600K for harassment at Everett location

A consent decree approved Friday settles sexual harassment and retaliation claims by four victims against the restaurant chain.

magniX employees and staff have moved into the company's new 40,000 square foot office on Seaway Boulevard on Monday, Jan. 18, 2020 in Everett, Washington. magniX consolidated all of its Australia and Redmond operations under one roof to be home to the global headquarters, engineering, manufacturing and testing of its electric propulsion systems.  (Andy Bronson / The Herald)
Harbour Air plans to buy 50 electric motors from Everett company magniX

One of the largest seaplane airlines in the world plans to retrofit its fleet with the Everett-built electric propulsion system.

Simreet Dhaliwal speaks after winning during the 2024 Snohomish County Emerging Leaders Awards Presentation on Wednesday, April 17, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Simreet Dhaliwal wins The Herald’s 2024 Emerging Leaders Award

Dhaliwal, an economic development and tourism specialist, was one of 12 finalists for the award celebrating young leaders in Snohomish County.

Lynnwood
New Jersey company acquires Lynnwood Land Rover dealership

Land Rover Seattle, now Land Rover Lynnwood, has been purchased by Holman, a 100-year-old company.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.