Amazon profits in the fourth quarter of 2024 grow 88% • Business • Forbes Mexico

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Amazon net earnings grew 88% to 20 billion dollars in the fourth quarter of 2024, compared to 10.6 billion reported in the same period of the previous year.

The Seattle retailer reported earnings of $ 1.86 per share, exceeding the expectations of $ 1.49 per share.

On the other hand, the company reported sales in the last quarter of last year that exceeded Wall Street estimates, but investors initially made their actions fall due to the weakness in the cloud computing unit and an income forecast lower than the expected

Amazon shares fell up to 4% in operations after the closure of the market after the report, which deleted around 90 billion dollars in stock capitalization value. Subsequently, the fall was reduced to about 2%.

The company’s sales forecast for the first quarter of 2025 did not meet the expectations of analysts, even if a negative impact of 2 billion dollars is taken into account due to the leap year. The company anticipates revenues between 151 billion and 155 billion dollars, compared to the average estimate of 158 billion dollars.

The company’s cloud unit, Amazon Web Services, reported a 19% increase in revenues, reaching 28.79 billion dollars, below the estimate of 28.87 billion dollars, according to data collected by LSE. Amazon thus adds to smaller cloud suppliers, such as Microsoft and Google, in reporting weak figures in this sector.

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The weakness in the cloud occurs in a context in which investors have become increasingly impatient with the multimillionaire capital spending of large technology companies and seek to obtain returns from their high investments in artificial intelligence.

“After very solid numbers in the third quarter, in this quarter the growth rates did not comply. That is what the market does not want to listen, ”said Daniel Morgan, senior portfolio manager in Synovus Trust. He added that this is especially worrying with the appearance of new competitors in artificial intelligence, such as the Chinese Deepseek company.

Like its rivals, Amazon is strongly investing in the development of artificial intelligence software. In his annual AWS conference in December, he presented new AI software models with which he hopes to attract both business clients and consumers. At the end of this month, the company plans to launch its expected Alexa voice service with generative artificial intelligence, after delays due to concerns about its quality and speed, Reuters reported this week.

The Microsoft and Alphabet competitors, Google matrix, also registered a slower growth in their cloud computing services during the fourth quarter of last year, which caused their actions to fall. These companies, together with Meta Platforms, indicated that the costs to develop infrastructure for artificial intelligence software will contribute to a strong increase in projected capital spending by 2025, which together would reach around 230 billion dollars.

Amazon’s retail business helped compensate for weakness in the cloud, with a 7% growth in online sales during the quarter, reaching 75.56 billion dollars. This exceeded estimates of 74.55 billion dollars.

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Amazon projected an operational gain of between 14 billion and 18 billion dollars for the first quarter of 2025, below the average estimate of analysts of 18.35 billion dollars.

The company reported revenues of 187.8 billion dollars in the fourth quarter, exceeding the average estimate of analysts of 187.30 billion dollars, according to data collected by LSE.

Advertising sales, a key indicator, increased 18% to 17.3 billion dollars, compared to the average estimate of 17.4 billion dollars.

With Reuters information

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