AIn its quarterly report published after the market closed on Thursday, mazon.com delivered a mixed picture: the group reported an unusual decline in sales for its core business in online trading, but growth in the cloud computing division accelerated. A stake in electric car maker Rivian, which went public in November, helped Amazon also a record profit.
The news was generally well received on the stock exchange, with the share price temporarily rising by 18 percent in after-hours trading. In regular trading, the share had previously lost 8 percent in value. In doing so, Amazon was in a similar position to many other tech companies whose stocks were down after a disappointing quarterly report of internet giant Meta came under pressure. Internet companies such as Snap and Twitter had to accept particularly significant price losses. However, Snap, like Amazon, reversed the trend again on Thursday after the market closed. After better-than-expected quarterly figures, the course even rose by more than 50 percent after the trading session.
Amazon reported revenue growth of 9 percent to $137.4 billion for the fourth quarter of 2021, about in line with analysts’ expectations. Net income nearly doubled to $14.3 billion, thanks to a $11.8 billion special gain from the Rivian investment. Operating profit, on the other hand, almost halved to $3.5 billion. Chief Executive Andy Jassy said in a statement the company suffered from higher costs last quarter due to staff shortages and general inflation.
Price increase on Prime
Amidst these challenges, Amazon has now announced that for the first time since 2018 it will increase the price of its Prime customer loyalty program, which offers subscribers, among other things, faster shipping at no additional cost and access to a with Netflix get a comparable video service. In America, the annual fee for Prime will now be raised from $119 to $139. Netflix also recently announced a price increase here.
Amazon’s weak point in the past quarter was online trading, which is all the more remarkable because the reporting period includes the important Christmas business. This time sales shrank here by one percent to 66.1 billion dollars.
On the other hand, the group has once again convinced with its cloud division Amazon Web Services (AWS). It brought in sales of $17.8 billion, up 40 percent year-on-year, the strongest growth in several quarters. AWS provides computing capacity and related services to companies that want to move their information technology to the Internet.
Poor prognosis
The division’s business is above-average profitable. Operating profit rose 49 percent to $5.3 billion, higher than the group as a whole. This means that all other divisions together were in deficit. AWS’s handsome profits are also notable in that Google, one of the biggest competitors in the business, reported a loss for its cloud division this week.
For the first quarter of this year, Amazon predicts sales of 112 billion to 117 billion dollars. That was slightly below analysts’ expectations and would represent growth of 3 to 8 percent over the past year. So Amazon is preparing for a further weakening.