Amazon Q4 Upbeat, Sees Sales Growth In Q1; But Stock Down

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(RTTNews) - Shares of Amazon.com Inc. declined around 4 percent in the extended trading on Thursday and are currently down around 3 percent in the pre-market activity on the Nasdaq, after the tech major projected slower sales growth in the first quarter than the fourth quarter, with a significant unfavorable foreign exchange imapct. This was despite reporting higher earnings, above the Street estimates, with strong growth in sales in the fourth quarter.

The Wall Street Journal reported that Amazon's sales outlook is weaker than expected.

In its earnings call, Amazon President and CEO Andy Jassy said, "As we look to 2025 and beyond, we see opportunity to reduce costs again as we further refine inventory placement, grow our same-day delivery network, and accelerate robotics and automation throughout the network. In advertising, we remain pleased with the strong growth on a very large base..."

For the first quarter, the company projects operating income to be between $14.0 billion and $18.0 billion, compared with $15.3 billion in first quarter 2024.

Net sales are expected to be between $151.0 billion and $155.5 billion, or to grow between 5 percent and 9 percent from the previous year.

The Wall Street analysts on average expect the company to record revenues of $154.06 billion for the next quarter. Analysts' estimates typically exclude special items.

According to the firm, the guidance anticipates an unusually large, unfavorable impact of approximately $2.1 billion, or 150 basis points, from foreign exchange rates. Also, in first-quarter 2024, the impact from Leap Year added approximately $1.5 billion in net sales.

In its fourth quarter, Amazon reported net earnings of $20.004 billion or $1.86 per share, compared with $10.624 billion, or $1.00 per share last year.

Analysts had expected the company to earn $1.48 per share.

In the quarter, operating income increased up 61 percent year over year to $21.2 billion.

The company's net sales for the period rose 10.5 percent to $187.79 billion from $169.96 billion last year. On a constant currency basis, net sales increased 11 percent.

North America segment sales grew 10 percent year-over-year to $115.6 billion. International segment sales increased 8 percent year-over-year to $43.4 billion, or 9 percent at constant currency rates.

AWS segment sales climbed 19 percent year-over-year to $28.8 billion, and now has a $115 billion annualized revenue run rate.

On the Nasdaq, Amazon shares closed Thursday's regular trading at $238.83, up 1.13 percent. Following the earnings report, the shares fell 4.05 percent in the extended trading.

In pre-market activity, the shares are currently at $232.65, down 2.6 percent.

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