AWS now makes up more than half of Amazon's revenues

Andrew Cummings
February 3, 2019

They still have some breathing room, however, as Facebook this week reported more than $16 billion in ad sales in just the fourth-quarter of past year, while Google is expected to top $135 billion in ad revenue in 2018 when it reports next week.

"Small and medium-sized businesses had their best holiday season ever in Amazon's stores".

Amazon's cloud business AWS is earning the company big bucks.

Operating cash flow increased 67% to $30.7 billion for the trailing twelve months, compared with $18.4 billion for the trailing twelve months ended December 31, 2017. Physical stores, which is primarily comprised of Whole Foods, saw a 3% decrease in revenue year-over-year.

Credit Suisse reiterated its Outperform rating but also warned that new business investment and initiatives, along with tough comps from before, likely mean that strong growth will resume at the earliest in the second quarter of 2019.

AWS sales increased 45 percent in the quarter to $7.4 billion and generated almost $2.2 billion in operating income.

Amazon's shares, which closed up 2.9 percent, to $1,718.73, fluctuated in after-hours trading - falling by more than 1 percent before rising by almost 3 percent. The fourth quarter 2017 included a provisional tax benefit for the impact of the U.S. Tax Cuts and Jobs Act of 2017 of approximately $789 million.

The company's $3 billion quarterly profit almost matched what it earned in all of 2017. AWS had operating income of $7.3 billion for 2018 to Amazon North America's $7.27 billion.

EPS came in at $6.04 on revenue of $72.4 billion, compared to expectations of $5.65 per share on $71.61 billion in revenue.

"Alexa was very busy during her holiday season", Bezos said in the earnings release. "Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to past year", Jeff Bezos, Amazon founder and CEO, said in a statement.

Brands and ad agencies have been working closely with Amazon as it builds an ad platform to compete with Google and Facebook, and $10 billion in 2018 makes it the third-largest ad business. The Just 100 award recognizes companies for the areas that matter most to customers, including jobs created, treatment of workers and customers, environmental and community engagement efforts, and more. Net sales increased 31 percent to $232.9 billion, compared with $177.9 billion in 2017. Excluding a foreign-exchange impact, the growth rate would be about 2 percentage points higher, said Chief Financial Officer Brian Olsavsky.

Operating income is expected to be between $2.3 billion and $3.3 billion, compared with $1.9 billion in first quarter 2018.

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