Amazon.com, Inc., the leading American e-commerce giant, has surpassed its own sales expectations for the fourth quarter of 2019, resulting in a 12% increase in its stock valuation and pushing it closer to the impressive $1 trillion mark. The company achieved net sales of $87.4 billion in the quarter ending December 31, 2019, marking a substantial 21% growth compared to the previous year’s $72.4 billion. Additionally, the operating income rose slightly from $3.8 billion to $3.9 billion. Within North America, sales saw a remarkable 22% increase, amounting to $53.7 billion, while international sales experienced a solid 14% growth, reaching $23.8 billion.

For the fourth quarter, Amazon reported a quarterly net income of $3.3 billion, or $6.47 per diluted share. This surpasses their previous year’s fourth-quarter net income of $3.0 billion, or $6.04 per diluted share. This impressive performance comes as a turnaround after Wall Street predictions in October 2019 indicated a decline in profits for the first time in over two years. At the time, Amazon predicted a net revenue range of $80 billion to $86.5 billion for Q4, and an anticipated operating income range of $1.2 billion to $2.9 billion.

Based on predictions by FactSet analysts, the market expected net earnings of $4.04 per share on revenues of $86.03 billion for Amazon. However, the better-than-expected sales and profits in Q4 indicate that the company’s investments in expanding their workforce and improving delivery times for Amazon Prime members are yielding positive results earlier than anticipated.

Jeff Bezos, the founder and CEO of Amazon, expressed satisfaction in the continuous growth of Prime membership, with a record number of new members joining in the fourth quarter. This brings the total count of paid Prime members worldwide to over 150 million. Bezos also highlighted the impressive improvements made in Prime delivery, noting that the number of items delivered to US customers with free one-day and same-day delivery has quadrupled compared to the previous year.

In total, Amazon’s net sales for the full fiscal year 2019 reached $280.5 billion, signifying a significant 20% increase (22% in constant currencies) compared to the previous year. Net income for the year was $11.6 billion, or $23.01 per diluted share, up from $10.1 billion, or $20.14 per diluted share in the previous year.

Looking forward, Amazon anticipates net sales of $69.0 billion to $73.0 billion for the first quarter of 2020, representing a solid 16% to 22% increase. Operating income for Q1 is predicted to range between $3.0 billion and $4.2 billion, compared to $4.4 billion in the same period last year.

Useful Links:
1. Amazon.com – Official website of Amazon
2. CNBC Article – Article providing additional details on Amazon’s Q4 2019 earnings.