Amazon (AMZN, Financial) reported fourth-quarter earnings and revenue that exceeded analyst expectations, with earnings per share (EPS) reaching $1.86 against the estimated $1.49. Revenue increased by 10% to $187.79 billion, surpassing the forecasted $187.3 billion. Despite these strong figures, Amazon's first-quarter guidance disappointed, leading to a 4% drop in after-hours trading, as its projected revenue growth of 5% to 9% was below analyst consensus of $158.5 billion.
The company highlighted foreign exchange rates as a significant adverse factor, impacting revenue by $2.1 billion. Amazon's first-quarter revenue growth is projected to be at the lower end since its 1997 IPO. The dollar index reached its highest level in over two years, influencing Amazon's revenue projections.
Amazon's AWS division saw a 19% revenue increase to $28.8 billion, slightly below expectations. This growth rate, however, lags behind Microsoft’s (MSFT) Azure and other cloud services, which saw a 31% increase, and Alphabet’s (GOOGL) cloud revenues that grew by 30%.
Amazon has been actively reducing costs under CEO Andy Jassy by cutting over 27,000 corporate jobs in recent years. The company continues to invest heavily in its AI endeavors, with planned capital expenditures of about $75 billion for 2024 to support new AI models and technology.
Amazon's advertising revenue also grew by 18% to $17.3 billion, solidifying its position as a top digital ad company in the U.S.
