Amazon joins the $1 trillion club on Thursday with a largely positive quarterly earnings report

Amazon
joined $1 trillion club on Thursday as it revealed a largely positive earnings
report that fueled an 11% rally in its stock. The only other companies that have
a market cap of $1 trillion are Apple, Microsoft, and Alphabet. The quarterly
performance results highlighted the tech giant to have beaten the analysts’
estimates for earnings and revenue by a massive margin.

Based
on Refinitiv’s data, analysts had anticipated $86.02 billion in revenue for the
online retail giant in the fourth quarter. On the earnings front, the company
was expected to post $4.03 per share. Thursday’s report, however, noted a significantly
higher $87.44 billion in revenue for Amazon in Q4 while the company announced a
remarkably higher $6.47 of earnings per share in the recent quarter.

Amazon
Web Services Generated $9.95 Billion In Revenue In The Fourth Quarter

Experts
had also forecast $9.81 billion in revenue generated by the Amazon Web Services
(AWS). But the American multinational technology company surpassed the estimate
in Q4 and printed a much higher $9.95 billion in revenue from AWS.

The
21% growth in quarterly revenue hinted at more purchases due to the sizeable
investments that Amazon has recently made in ensuring speedier shipping. In
2019’s holiday season, the company reports, shopping was recorded at an
unparalleled level that saw both the same-day as well as one-day deliveries
being quadrupled in the fourth quarter.

In
the fiscal first quarter of 2020, Amazon is now expecting $69 billion to $73
billion in revenue. According to Brian Olsavsky, there is currently no means of
accurately predicting if the Coronavirus
outbreak in China can be expected to weigh on the company’s results.

CEO
Jeff Bezos also highlighted in the Q4 earnings report that the tech giant now
has over 150 million paid Amazon prime members from across the globe. In April
2018, the figure was capped at 100 million members.

Amazon
To Invest $1 Billion Into Expanding The One-Day And Same-Day Deliveries

Amazon
had announced last October that it intends to expand its investment to $1.5
billion in the upcoming holiday season in order to smoothen the same-day and
one-day deliveries. As expected, therefore, Amazon’s costs associated with
worldwide shipping saw a massive 43% increase (year over year) in the fourth
quarter. Such costs were recorded at $12.9 billion.

As
per the CFO, while the investment was noted a little below the claimed $1.5
billion, Amazon is committed to spending another $1 billion on the initiative
in the first quarter. Despite
its investments, however, Amazon posted an 8% increase in its net income to
$3.27 billion that was remarkably higher than the $2 billion estimate.