Amazon Q4 results: shares down after beating earnings revenue estimates

Amazon stock was slightly up before dropping in US afterhours trading.

Amazon logo after Amazon Q4 results Source: Bloomberg

Amazon stock is down after a slight increase after its latest fourth quarter (Q4) results. Amazon's revenue and earnings per share easily beat estimates.

Amazon earnings:key figures

Earnings per share (EPS) $6.04
Revenue $72.4 billion
Amazon Web Services (AWS) $7.43 billion
Shares increase 18%
Net income $3 billion

Amazon earnings

Amazon’s earnings per share (EPS) was $6.04, exceeding the $5.68 financial experts predicted. Amazon Q4 revenue was $72.4 billion, an increase of 19.7%, the lowest growth in four years. The figure narrowly beat Wall Street expectations. The company’s cloud computing web services made $7.43 billion, more than the $7.3 billion estimated. The expectations kept in line with earlier predictions about Amazon's Q4 results.

Amazon’s cash flow was also impressive, growing to $21 billion. The Alexa voice-activated products also helped to increase Amazon’s profits. The corporation’s chief executive officer, (CEO), Jeff Bezos, spoke about the successful products.

‘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,' Bezos said in a statement.

While Amazon’s profits grew because of its web services, its physical stores saw a decline. Sales in its Whole Foods and bookstores declined by 3%. Amazon's profits also increased because of third-party sales on its website.

‘Third-party sales are growing faster than first-party sales, and nearly 200,000 small- and medium-sized businesses surpassed $100,000 in sales in Amazon’s stores in 2018,’ said Amazon.

What do Amazon's Q4 results mean for their share price?

Amazon’s Q4 results mean that the share price will include volatility. Amazon’s share price slightly rose before plummeting in US after-hours trading. Amazon beat estimates, but offered weaker-than-expected guidance because of slowing international sales, which likely worried investors. Amazon’s share price is fluctuating up and down around its current $1,718.73.

How do Amazon’s Q4 results compare to other tech stocks?

Amazon’s Q4 results are positive, similar to the better-than-expected earnings results of Apple and Facebook. All those tech stocks overcame the stock volatility of 2018 to rebound with their latest earnings reports.

What is Amazon’s dividend forecast?

Amazon’s dividend forecast is weaker-than- expected. Amazon’s Q1 revenue is expected to be between $56 billion and $60 billion. That’s less than estimates of $60.8 billion.

Amazon’s Q1 operating income is expected to be between $2.3 billion-$3.3 billion,an increase over $1.9 billion of last year.

Amazon’s Q4 results send a mixed signal to investors. Its positive revenue report shows that the company is still profitable. However, the corporation still has to carefully navigate the global economy to determine how much revenue Amazon will generate in the future.

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