Summits Yellow

Amazon exceeds expectations with Q4 results and delivers share price bump

Tim Maytom

Amazon has reported its crucial holiday season financial results and the numbers are truly impressive, with earnings per share coming in at more than double what some analysts were predicting. Net income for the quarter was $1.9bn (£1.34bn), with net sales of $60.5bn, up 38 per cent year-on-year.

Part of the firm's impressive results can be credited to a tax cut that benefited the eCommerce giant to the tune of $789m, but even removing that from the equation, the company would have still beaten estimates. Earnings-per-share were at $3.75 with the tax cut and $2.15 without, compared to expectations of just $1.83.

Amazon reported strong growth in all its ventures, with its cloud services business in particular performing well. Amazon Web Services brought in $5.1bn, up from $3.5bn in Q4 2016, and its operating income grew by 46 per cent to $1.4bn, accounting for 73 per cent of all net income that Amazon posted for the period.

Full-year revenues for the company came in at $177.9bn, up 31 per cent year-on-year, while profit reached $3bn, compared to $2.4bn in 2016. In the wake of the results, shares in Amazon rose by six per cent in after-hours trading.

According to Amazon, more than 5bn items were shipped worldwide by Prime members, with more new paid members joining the company's subscription service in 2017 than in any previous year, both in the US and worldwide.

The firm also trumpted the success of its Alexa voice assistant and Echo line of smart speakers, which sold tens of millions of devices over the last year. The Echo Dot, alongside the company's Fire TV Stick, were the best-selling products of the year across Amazon.

"Our 2017 projections for Alexa were very optimistic, and we far exceeded them," said Jeff Bezos, founder and CEO of Amazon. "We don't see positive surprises of this magnitude very often — expect us to double down.

"We've reached an important point where other companies and developers are accelerating adoption of Alexa. There are now over 30,000 skills from outside developers, customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa, and we're seeing strong response to our new far-field voice kit for manufacturers."