Amazon.com Inc. (NASDAQ: AMZN) finished 2018 strong, reporting net sales of $72.4 billion for the fourth quarter, compared to $60.5 billion in the fourth quarter of 2017, representing a 20 percent increase. For the full year, net sales increased 31 percent to $232.9 billion, compared to $177.9 billion in 2017.
Net income for the fourth quarter was $3.0 billion, or $6.04 per diluted share, compared to $1.9 billion, or $3.75 per diluted share in the fourth quarter of 2018. Net income for the year was $10.1 billion, or $20.14 per diluted share, compared to $3.0 billion, or $6.15 per diluted share, in 2017.
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Additional financial highlights for the include:
- Operating income for Q4 was $3.8 billion, compared to $2.1 billion in Q4 2017.
- Operating cash flow in Q4 increased 67 percent to $30.7 billion for the last 12 months.
- Free cash flow in Q4 increased to $19.4 billion for the last 12 months.
- Operating income for the full year was $12.4 billion, compared to $4.1 billion in 2017.
“Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year,” said Jeff Bezos, Amazon founder and CEO, in a January 31 news release.
“The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017,” added Bezos. “We’re energized by and grateful for the response, and you can count on us to keep working hard to bring even more invention to customers.”
Amazon shared dozens of operational highlights for the year. Here are a few we found particularly interesting:
– Amazon raised its hourly minimum wage to $15 in the U.S.
– During the 2018 holiday season, tens of millions of customers around the world started Amazon Prime free trials or started a paid membership, more than ever before.
– Amazon-owned IMDb launched IMDb Freedive, a free, ad-supported streaming video service.
– Prime video is now available on Comcast’s Xfinity X1 box in the U.s.
– Amazon launched NBA League Pass and PGA Tour Live on the Prime Video Channel dashboard, so Prime members can subscribe directly to those premium streaming services via Amazon.
– Amazon Studios received 10 Golden Globe nominations and two wins, including Rachel Brosnahan who won Best Actress in a Television Series for her starting role in The Marvelous Mrs. Maisel and Ben Whishaw for Best Supporting Actor in A Very English Scandal.
– Amazon expanded free grocery delivery and pickup from Whole Foods market through Prime Now.
– Prime free same-day delivery and one-day shipping expanded to more than 10,000 U.S. cities.
– Amazon Air expanded its fleet to include 10 more aircraft.
– Amazon Web Services added more enterprise customers including Ellie Mae, Korean Air and Pac-12.
The company provided the following guidance for the first quarter of 2019:
– Net sales between $56 billion and $60 billion, representing growth between 10 percent to 18 percent growth
– Operating income between $2.3 billion and $3.3 billion, compared to $1.9 billion in Q1 2018
Despite the positive report, Amazon stock dropped from $1,718.73 per share on January 31 to $1,626.23 per share as of 7:59 p.m. EST on February 1, a drop of $92.50 per share.
Amazon.com Inc. (NASDAQ: AMZN) finished 2018 strong” class=”figure-max-height” /> Source: Google
Despite growing competition in the streaming video and online retail spaces, Amazon continues to hold its own. The company reported a strong fourth quarter and even stronger full year, but stock dropped temporarily. In terms of the big picture, this time last year, Amazon was valued at $1,390.00 per share on February 5, 2018, so Amazon’s value continues to increase. According to Barron’s, this pattern is not surprising. Barron’s reports that Amazon stock often declines after its fourth quarter results. This may be due to the company’s first quarter forecast.