Amazon shares surged 10% on news of a very profitable holiday season
Amazon reported earnings and revenue from the key holiday quarter that beat Wall Street estimates, showing the largest U.S. e-commerce company can invest heavily in next-day delivery without devastating its bottom line. Shares surged 10% on the news.
Fourth-quarter sales were $87.4 billion and profit was $6.47 a share, the Seattle-based company said Thursday in a statement. Analysts were looking for sales of $86.2 billion and earnings of $4.11 a share, according to data compiled by Bloomberg.
Amazon is spending to fend off rivals in several key parts of its business. In e-commerce, the company is rolling out next-day delivery, up from its previous two-day offering, to fight intensified competition from Walmart and other retailers. The Amazon Web Services cloud business is building new data centers and hiring engineers in response to steady gains by Microsoft and a renewed customer push from Alphabet’s Google. Meanwhile, Amazon continues to plow money into overseas markets such as India and Brazil.
Some analysts had been particularly concerned about slowing growth and rising costs at AWS, the source of about two-thirds of Amazon’s operating income in recent years. Thursday’s results dispelled those worries for now.
Shares jumped to a high of $2,066.76 in extended trading after closing at $1,870.68 in New York on Thursday. Amazon stock has climbed about 12% in the past year, lagging behind tech industry peers.
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