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Retail monster Amazon.com reported higher than expected fourth quarter earnings Thursday, beating on revenue and on EPS. $AMZN was up 12% on upbeat guidance now expecting higher revenue.

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CEO Jeff Bezos Adding To His 'World's Richest Man Stats

Amazon.com Inc. (NASDAQ: $AMZN) Reported After Close Thursday

$6.47 Beat $4.03 EPS Forecast and $87.44 Beat $86.02 Billion Forecast in Revenue 

Earnings

Amazon.com Inc. (NASDAQ: AMZN) reported fourth-quarter results after the close on Thursday with earnings per share of $6.47 per share vs. expectations of $4.03 per share, according to analysts surveyed by Refinitiv. Revenue was $87.44 billion vs. expectations of $86.02 billion, per Refinitiv

Amazon Web Services: $9.95 billion vs. expectations of $9.81 billion, according to FactSet The company also gave upbeat guidance for the coming quarter,

Amazon.com Inc NASDAQ: AMZN

Market  Reaction: After hours $2,122.46 +251.78 (+13.46%)

Earnings Highlights

In the earnings release, Amazon CEO Jeff Bezos said “more people joined Prime this quarter than ever before” and that the company now counts more than 150 million paid Prime members around the world.

Amazon last gave an update on Prime subscribers in April 2018, saying it had more than 100 million members in the program.

Highlights

  • Amazon’s advertising business generated $4.8 billion in revenue during the quarter, which is a 41% increase from the year-ago period.
  • Amazon’s worldwide shipping costs increased significantly during the quarter, climbing 43% year over year to $12.88 billion.

amazon Q4 2019 earning

Outlook

The company  gave upbeat guidance for the first quarter, saying it now expects to report revenue between $69 billion and $73 billion. In the earnings release,

 

What Analysts Watch On Amazon

 

Prime Membership

Earlier in October Amazon Prime Day set another sales record during the two-day sales promotion,

e-Commerce Expansion

Investors will want to hear Amazon's  e-commerce expansion into retail markets like apparel and grocery, in particular Wholefoods.

Which new addressable markets is Amazon attacking, across grocery, pharmaceuticals, gaming and others?

Amazon Web Sevices (AWS)

The biggie is cloud behemoth Amazon Web Services (AWS) cloud. Microsoft and SAP both reported robust Cloud numbers. The big question is that from AWS or new customers?


AWS architecture

In cloud-computing infrastructure, Amazon has a substantial market share lead over Microsoft Azure, Google's Cloud platform and IBM, as well as other players like Alibaba and Oracle. While AWS has maintained growth above 40 percent, Microsoft and Google are currently expanding much faster and picking up share. AWS accounts for around 73 percent of Amazon's operating income in Q1 and continues to grow.

AWS is the envy of Apple, Oracle, Google, IBM and every other niche cloud provider. AWS is the leading platform in this growth market.  Amazon Web Services., Amazon's cloud business in just ten years has become the fifth-largest business software provider in the world.

Amazon has proven that it can diversify beyond e-commerce whilst at the same time Microsoft, Google, IBM and others are all chasing AWS in the cloud.

AWS is almost twice as big as Salesforce

Brick and Mortar Acquisitions and Partnerships

Over the past few years Amazon has been on a buying spree with WholeFoods, talk of Amazon Moving Into Real Estate and last yearr the deal with Sears where Kenmore appliances will be sold through Amazon. Investors will be looking for updates on these and others and a clarification of just what is their strategy going forward. One I would like to hear is about the Whole Foods locations and the $400 billion plus pharmacy market.

There is retail partnerships like this with Kohl’s Corporation $KSS. Amazon will  start selling smart-home products in Kohl’s stores and cater for product returns. With Whole Foods, Sears and now Kohls Amazon is stealthly building brick-and-mortar retail for it's digital base.

 

Source: Amazon.com AlphaStreet

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