Published: Sun, February 03, 2019
Markets | By Otis Pena

Amazon sales outlook falls short after record holiday quarter

Amazon sales outlook falls short after record holiday quarter delivered revenues of $72.4 billion, capping off a year in which it reported total revenues of $232.9 billion.

For the second year in a row, Amazon was ranked the company Americans love most on Morning Consult's Brands that Defined 2018, and it was named America's Most JUST Company in Retail on JUST Capital's Just 100 list.

The midpoint of the revenue-growth guidance, 14 percent, would represent the slowest quarterly growth at Amazon since at least 2012.

The company forecast net sales of between $56 billion and $60 billion for the first quarter, missing analysts' average estimate of $60.77 billion, according to IBES data from Refinitiv.

The $7.4 billion in cloud revenue for the quarter ending December 31 marked year-over-year growth of 45 percent at AWS-$130 million more than analysts had predicted.

Amazon posted another record profit last night as it beat Wall Street's fourth-quarter forecasts but gave investors cause for concern with a disappointing outlook. Some of this sequential deceleration can be explained by the fact that this was the first quarter in which Amazon was up against a full period of Whole Foods sales in the year-ago quarter. However, this guidance was below expectations-Amazon blames an "unfavorable impact of ... foreign exchange rates"-sending its stock price tumbling".

With its new milestone, Amazon has reached the US$200 billion mark only 24 years after launching.

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Annual net income increased to $10.1 billion United States dollars (roughly $13.26 billion CAD) in 2018, compared to $3.0 billion USD (roughly $3.94 billion CAD) in 2017.

Amazon's healthy growth is still the envy of the retail world, but its slower revenue growth - which was as high as 43 percent in 2018 - does signal a broader shift for the company.

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.

FILE PHOTO: The logo of Amazon is pictured inside the company's office in Bengaluru, India, April 20, 2018.

Market capitalization. Grew to $840 billion Thursday afternoon, more than Microsoft, Apple, or any other publicly traded company.

"Amazon will now need to work doubly hard to achieve any future sales gains", he said in a research note.

Amazon has historically delivered relatively little profit as it fulfills Bezos's strategy of investing to stay ahead. The online retailer's brick-and-mortar strategy also includes bookstores and a cashierless convenience store called AmazonGo, which lets customers check in with a smartphone app and be charged automatically based on what they remove from the store. That may drag down Amazon's recent big jumps in profit.

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