Analyzing Amazon's Fourth Quarter: Cloud Business Slows But Advertising Revenue Surges
Amazon reported better-than-expected revenue for its fourth quarter, but issued first-quarter guidance that fell short of estimates. The stock slid more than 3% after hours, erasing most its rally from the regular trading day. Amazon closed out its slowest year of growth in its quarter century as a public company, with revenue for the year increasing 9%.
The e-retailer said it expects to post first-quarter revenue between $121 billion and $126 billion, representing year-over-year growth of 4% to 8%. Sales in the company’s online stores segment contracted 2%. Amazon’s cloud business — Amazon Web Services — also missed estimates for the fourth quarter, reflecting a slowdown in business spending.
On the other hand, Amazon’s advertising revenue jumped 23% from a year earlier, outpacing online ad companies. This highlights Amazon’s emergence as a leader in digital advertising, giving brands and sellers more ways to pay to promote their goods across the company’s website, apps and media properties.