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Amazon had another strong holiday season: Its quarterly profit topped $3 billion for the first time as revenue grew across its businesses, including online shopping, advertising and cloud computing.
The Seattle-based company’s estimated revenue for the current quarter, however, was below what Wall Street analysts expected.
Amazon, which recently surpassed Microsoft as the most valuable publicly traded company in the U.S., reported net income of $3.03 billion for the last three months of 2018. On a per share basis, it had net income of $6.04, beating the $5.55 per share analysts expected, according to Zacks Investment Research.
Shoppers will spend $484 billion globally on Amazon this year, up 26 percent from 2018, and the company will capture more than half of all online spending in the U.S., according to EMarketer Inc.
Chief Executive Officer Jeff Bezos has been pushing beyond the low-margin business of selling goods online into more profitable categories like cloud computing and advertising. Those profits also help fuel Amazon’s growing devices business, which includes smart-home and connected-car gadgets that operate on Amazon’s voice-activated Alexa platform.
Strength in online sales over the holiday period showed Amazon still has room to grow in its core business and is benefiting from excitement around its new devices, said Ron Josey, an analyst at JMP Securities.
“This company continues to take wallet share and operate very well,” he said.
Revenue rose 20 percent to $72.38 billion, beating the $71.73 billion that analysts expected.
For the current quarter ending in April, Amazon said it expects revenue in the range of $56 million to $60 million. Analysts expected revenue of $61.19 billion.
Investor excitement about Amazon’s growing profits helped push the stock to a record high in September before the shares dipped during a broader market slump at year’s end. Amazon shares are up about 14 percent this year on investor optimism that the company can maintain growth and profitability, and closed at $1,718.73 before the results were released. Amazon had jumped back above Microsoft Corp., which is No. 2 in cloud computing, as the most valuable publicly traded company, with a market capitalization of $840.4 billion.
A tight labor market, rising shipping costs and money-losing investments abroad remain threats. Amazon in October pledged to pay all of its warehouse employees at least $15 an hour, while eliminating some bonuses and stock awards. The cost of stowing, packing and delivering goods increased 12 percent in the holiday quarter to $10 billion, in line with online sales growth of 12.5 percent.
Bloomberg and The Associated Press contributed to this report.
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