Amazon (AMZN) reported fourth-quarter results late Thursday that beat on revenue but missed on earnings, as its typically strong cloud computing unit failed to rescue the e-commerce giant. AMZN stock dropped in late trading.
Amazon reported adjusted earnings of 3 cents a share on revenue of $149.2 billion. Analysts expected Amazon to report earnings of 17 cents a share on revenue of $145.7 billion.
Revenue climbed 9% from the year-ago period, and compared with 15% growth in the prior quarter.
Sales for its cloud computing unit, Amazon Web Services, jumped 20% to $21.4 billion but were slightly below expectations and down from 27.5% growth in the third quarter.
Outlook Falls Below Views
The company expects first-quarter revenue in the range of $121 billion to $126 billion, or to grow between 4% and 8%. The midpoint of $123.5 billion is below the Wall Street's estimate of $125.13 billion.
AMZN stock fell 4.3% to 108.08, during after-hours trading on the stock market today.
Ad revenue climbed 19% to $11.6 billion, slightly ahead of estimates.
"In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon," Chief Executive Andy Jassy said in prepared remarks with the earnings release.
AMZN Stock: Large-Scale Layoffs
The company's performance of late has been weighed down by a challenging economic environment that has hit e-commerce companies globally.
In January, Amazon confirmed it's laying off 18,000 workers, the largest cutback in its 28-year history. The layoffs are the largest at a major technology company thus far in a slew of cutbacks throughout the industry.
In addition to a weakening economy, a number of adverse effects worked against tech companies such as a sharp slowdown in digital ad spending, inflation, rising interest rates and growing recession fears
CEO Andy Jassy, who succeeded founder Jeff Bezos at the helm in July 2021, has spent the past year working to reel in costs. In January, Amazon said it’s eliminating 18,000 jobs among its corporate workforce, after cutting a number of employees last November. The company has also instituted a hiring freeze in its corporate ranks, cut some projects and paused warehouse expansion in an effort to tame rising expenses.
Jassy made a surprise appearance on the company’s earnings call, telling analysts that he wanted to offer his thoughts after wrapping up his first full year at the helm. His predecessor, Jeff Bezos, stopped participating in earnings calls in 2009, according to The Wall Street Journal.
“We’re working really hard to streamline our costs and trying to do so at the same time that we don’t give up on the long-term strategic investments that we believe can meaningfully change broad customer experiences and change Amazon over the long term,” Jassy said on the call.
Jassy said in a statement that the company is “encouraged by the continued progress” it’s making in lowering retail costs.
“In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon,” Jassy said.
Amazon’s cloud business — Amazon Web Services — missed estimates for the fourth quarter, reflecting a slowdown in business spending. AWS grew just 20% in the period, down from 27.5% in the third quarter.Click for more details