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.

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

More in Herald Business Journal

Logo for news use featuring Snohomish County, Washington. 220118
Business Briefs: Seagen appoints new CEO; new research president

Also, Eviation order book tops $2 billion and Bothell business incubator secures half-million dollar grant.

Mother-daughter duo Judi and Emma Kate Ramsey join together to run Artisans PNW on Hewitt Avenue Saturday, Nov. 26, 2022, in Everett, Washington. (Ryan Berry / The Herald)
Artisans PNW in Everett offers local gifts, books and art

The Everett store that opened in May can trace its roots to an enterprising Girl Scout troop in Snohomish.

No caption
9 Snohomish County crafters to check out this holiday season

From puzzle cubes to Mickey Mouse ears, locals have found a market online for niche products.

Cassandra Bell and husband Matthew Bell at their second hand story Cassandra’s Closet on Wednesday, Nov. 23, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Now open: Cassandra’s Closet, a new downtown Everett boutique

This boutique has 12 months to make it a go! The store sells new and used women’s and men’s clothing.

Petrikor co-owners Aaron Sheckler and Scott Hulme stand inside the entrance of their new modern general store on Sunday, Sep. 18, 2022, in downtown Everett, Washington. (Ryan Berry / The Herald)
Petrikor, in downtown Everett, grew from online to brick-and-mortar

The store is a labor of love for two local entrepreneurs who longed for a better kind of home and garden store.

Logo for news use featuring Snohomish County, Washington. 220118
Business Briefs: State minimum wage rises in January

Also, Boeing workers’ donations support local nonprofits and fundraiser for businesses impacted by Bolt Creek wildfire.

Jollee Nichols, right, and daughter Ruby, 2, work on an art project together at the Imagine Children’s Museum on Wednesday, Oct. 26, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
With new addition, Imagine Children’s Museum doubles in size

More than just space, the Everett museum’s new $25 million wing is an investment in mental health.

Artistic rendering of 526 Speedway exterior. (Mosaic Avenue Realty Ltd.)
Mosaic Homes looks to add industrial condo space in Mukilteo

Mosaic Homes steps into commercial real estate development with 526 Speedway, an industrial condo project.

Andy Illyn with a selection of his greeting cards, Cardstalked, that are sold at What’s Bloomin’ Floral on Friday, Oct. 28, 2022 in Arlington, Washington. (Olivia Vanni / The Herald)
Adventure-seeking cop finds new thrill in greeting cards

Mukilteo assistant police chief Andy Illyn unwinds by turning puns and dad jokes into greeting cards.

Most Read