advertisement
advertisement

Amazon stock blows up: Monster earnings show huge profits amid one-day shipping investments

Amazon has been spending money hand over fist to get its one-day shipping up to speed, but its holiday profits are doing just fine.

Amazon stock blows up: Monster earnings show huge profits amid one-day shipping investments
[Photo: www.quotecatalog.com]
advertisement
advertisement
advertisement

Jeff Bezos just got a lot richer.

advertisement
advertisement

Amazon.com Inc. reported fourth-quarter 2019 earnings this afternoon, and profits over the holiday season were through the roof. The e-commerce company reported earnings per share of $6.47 on revenue of $87.44 billion—far outstripping what analysts were anticipating.

For context, analysts only expected EPS of $4.03, according to a consensus estimate cited by CNBC. Revenue was expected to grow 19% to $86 billion.

Amazon shares skyrocketed more than 12% in after-hours trading, hitting a new benchmark of $2,115. It’s unclear if the bump will last until tomorrow’s opening bell.

advertisement
advertisement

In a statement, Bezos said Amazon Prime now has more than 150 million paid subscribers globally.

Amazon has been spending money hand over fist to get its one-day shipping up to speed. It poured $800 million into the effort during the second quarter of 2019, another $800 million during the third quarter, and it said in October that it would spend $1.5 billion on top of that during the fourth quarter. That spending was expected to ding profits, but then Amazon is no stranger to this strategy: For years after going public it tested investors’ patience by sacrificing profits in the name of scaling the business.

All this makes today’s earnings beat that much more impressive. Another notable highlight of the report is Amazon Web Services, the company’s cloud business, where revenue hit $9.95 billion against a consensus estimate of $9.81 billion. Sales for the AWS unit were up more than 37% in 2019 compared to the prior year.

advertisement

You can check out the full earnings release here.

About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

More