Amazon rakes in £120bn in 3 months… but shares tumble after the tech giant suffered a £2.2bn loss as soaring costs wipe out profits
Amazon made over £120 billion in sales in the last three months of the year.
The US tech giant said its revenue rose 9% to £122bn in the fourth quarter, meaning it was earning up to £1.3bn a day.
The earnings numbers shattered Wall Street’s forecast for the crucial holiday season.
But the company’s shares fell after hours trading on Wall Street as it posted an annual loss of £2.2bn.
The company said profits fell to £2.2bn in the fourth quarter from £2.9bn in the same period a year earlier.
Revenue up: Amazon, founded by Jeff Bezos (pictured with partner Lauren Sanchez) said revenue rose 9% in the fourth quarter, meaning it took in £1.3million a day
For the full year, revenue increased 9% to £420 billion. But that wasn’t enough to keep it from tumbling into the red all year.
Wedbush technical analyst Dan Ives said the rise in revenue meant fears of a “horror show” were averted.
But investors worried about the outlook and how soaring costs had wiped out its earnings.
Amazon cashed in during the Covid shutdowns as it benefited from the boom in online shopping and remote working.
But those fortunes changed last year as central banks raised interest rates to fight inflation and concerns grew about the health of the global economy.
Amazon chief executive Andy Jassy, who took over from founder Jeff Bezos in 2021, has made it his mission to cut costs in the face of the economic crisis.
In its third-quarter update in October, Amazon missed revenue forecasts and warned of a disappointing fourth quarter, sending shares tumbling.
Investors were particularly spooked by predictions of a lackluster Christmas as shoppers worried about limiting spending in the face of rising living costs.
The gloom has sent shares plunging by as much as a fifth, adding to the stock’s 51% fall in 2022. Amazon workers last week staged their first strike in the UK, ringing the bell. alarm for the operations of the American giant.
Members of the GMB union at the company’s warehouse in Coventry have voted to quit in protest at a pay rise which the union says is worth 50p an hour.
Last month, Amazon also announced that it would cut more than 18,000 jobs in its biggest reform in its history.
This follows rampant hiring during the pandemic, where it increased its global workforce to 1.5 million.
“Companies that last for a long time go through different phases. They’re not in heavy person expansion mode every year,” Jassy told employees.
“This year’s review was more difficult given the uncertain economy and the fact that we have been hiring quickly over the past few years.”
÷ Alphabet reported quarterly revenue below expectations as Google’s parent company’s digital advertising business struggled in the face of an economic slowdown that stifled business spending and triggered mass layoffs.
Revenue from Google advertising, which includes search and YouTube, fell to £48.4bn from £50.2bn as advertisers – the biggest contributors to Alphabet’s sales – cut spending to deal with persistent inflation, high interest rates and fears of recession.
Alphabet’s profits fell to £11.2bn from £16.9bn a year earlier.
