Amazon Revenues Climb 20 Percent to $72.4 Billion

Amazon wage hike pays off as it reveals record profits

'Alexa was very busy': Amazon reports record profits and strong holiday season

Amazon (AMZN) reported strong fourth-quarter results, with earnings smashing expectations and revenue also stronger than expected.

Nonetheless, he said that compared to many other retailers, the firm's retail sales figures were still strong.

For the full 2018 fiscal year, Amazon reported a net sales increase of 31 percent to $232.9 billion, up from $177.9 billion in 2017.

Colin Sebastian, an analyst at Baird Equity Research, said, "The issues in India are taking a toll on the Q1 outlook, even as growth overall slows domestically".

Shares of Amazon are up around 17% over the past year. This time that didn't happen.

FILE PHOTO: The logo of Amazon is pictured inside the company's office in Bengaluru, India, April 20, 2018.

For one thing, the law of large numbers is finally starting to apply, making it harder for Amazon to maintain such huge percentage jumps. This is still an improvement from the year-ago quarter when revenue was $18bn and loss was $919m.

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This expansive customer base has lured merchants to sell goods on the company's marketplace, to the point where more than half of products sold on Amazon come from third-parties.

Amazon founder and chief executive Jeff Bezos - also the world's richest man - singled out virtual assistant Alexa as a key performer. But so far that hasn't appeared to happen. AWS revenue alone made up 10 per cent of Amazon's total quarterly sales - reinforcing just how dominant cloud computing has become for a company broadly thought of as an online retailer. With Amazon controlling 50 percent of e-commerce purchases in the United States, more sellers have an incentive to fork over money for these ads.

Investor excitement about Amazon's growing profits helped push the stock to a record high in September, before the shares dipped during a broader market slump at year's end.

"Fourth quarter results are expected to reveal an ad player that is on its way to eventually challenge Facebook for the No. 2 spot", eMarketer analyst Monica Peart said in a statement ahead of the earnings announcement.

Amazon sells search ads similar to Google's search system and it sells display and video ads. On a call with reporters, finance chief Brian Olsavsky also said headwinds from foreign currency exchange rates are curbing revenue in the current period. Sales in physical stores, which are predominantly Whole Foods locations, decreased 2.7 percent to $4.4 billion. He added that he expects the company to increase investments this year relative to 2019, in part to support the continued growth of Amazon Web Services (AWS), its computing and software rental business.

While its growth may be slowing, Amazon's profits and profitability are mounting.

Shoppers will spend $484 billion globally on Amazon this year, up 26 percent from 2018, and the Seattle-based company will capture more than half of all online spending in the US, according to EMarketer Inc.

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