Amazon shares fell 4% in after hours trading after the online giant revealed this morning that it had its biggest ever December quarter holiday sales, which fell short of overly optimistic expectations from investment analysts.
Compared to the other big tech stocks – Netflix, Apple, Alphabet and Facebook, Amazon’s figures are not as eye opening – although Alphabet (Google) produced a set of less than inspiring numbers, the Amazon report has deadened the boom like sentiment after Netflix and Facebook surprised on the upside and Apple did much better than expected.
Amazon said quarterly revenue jumped 22.4% in the December quarter to $US43.74 billion. The company said the surge was driven by strong sales in the holiday period and a jump in subscriptions for its Prime service.
But the $US8 billion rise in the quarter from the $US35.75 billion a year earlier was less than the $US44.68 billion estimate from analysts, according to Thomson Reuters.
Amazon’s net income jumped 54% to $US749 million, from $US482 million in the final three months of 2016.
Revenue from Amazon Web Services, the company’s cloud services business, surged 47% to $3.54 billion, also missing the average analyst estimate of $US3.60 billion, according FactSet.
Amazon said last month that the 2016 holiday was its best-ever shopping season, when it shipped 50% more items than the prior year for third-party vendors.
Amazon also worried analysts and others with guidance for the current quarter – the company says it’s expecting operating income to be between $US250 million and $US900 million down from $US1.1 billion in the same quarter last year.
First-quarter forecast calls for revenue of $US33.25 billion and $US35.75 billion, while analysts projected on average $US36 billion (they are far too optimistic it seems).
Amazon says its Alexa-enabled products were top sellers across all categories on Amazon this holiday season, says Echo sales up 900% from last holiday season. But unlike Apple and Facebook, no figures on product sales were given. Alex and Echo are AI based products for the home.
