Amazon shares seen opening higher on strong earnings release

Amazon's earning release posted strong results for the global tech giant, with the biggest fourth quarter profits on record as Alexa outperformed and Prime memberships surged.

Amazon shares seen opening higher on strong earnings release

Amazon shares are seen opening higher in the US later Friday, after the global tech giant published its latest impressive earnings release. Not only did Amazon’s full year revenues rise 31%, its fourth quarter profits were the largest in the online retailer’s history.

Amazon shares closed 4.20% lower at $1,390 in the US Thursday, as investors awaited its after-hours earnings release. Out-of-hours trading currently places Amazon shares 5.51% higher.  

Amazon’s earnings upbeat all-round

Amazon’s widely anticipated earnings release didn’t disappoint. Fourth-quarter earnings for the tech behemoth more than doubled to $1.9 billion from a year earlier. The etailer said that over 4 million new users signed up to its Prime service in one week alone, during the final three months of 2017.

Other eye-popping details were total full year net sales of $177.9 billion, and full year profits of $3 billion, up from $2.4 billion in 2016.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” said Amazon founder and CEO Jeff Bezos in the Amazon earnings press release. “We don't see positive surprises of this magnitude very often -- expect us to double down.”

Other highlights from the Amazon earnings release included:

  • Over 5 billion items were shipped by Prime.
  • More new members joined Amazon in 2017 than ever before.
  • Alexa’s growth was supported by working with a rising number of external brands.
  • AWS released 497 new services and features during the fourth quarter alone.

Amazon also detailed that the new US tax rules had provided the global tech innovator with a $789 million benefit, following the reduction of the US corporate tax rate from 35% to 21%.

Amazon’s 2018 outlook

After a stellar 2017, Amazon’s 2018 outlook is also positive. First quarter net sales growth is anticipated to be in the range of 34% and 42% from Q1 2017.

First quarter guidance on operating income, meanwhile, is between $300 million - $1 billion. In Q1 2017, Amazon’s operating income was $1 billion.

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