Amazon exceeded Wall Street's revenue projections but offered conservative guidance for the upcoming quarter, leading to a decline in its share price after the market closed. Despite strong earnings, the company's outlook raised concerns among investors.
Amazon released its earnings on Thursday, surpassing Wall Street's revenue projections but offering conservative guidance for the current quarter that triggered a decline in its share price after the market closed. The tech giant reported net sales of $187.79 billion, exceeding the anticipated $187.32 billion, while earnings per share reached $1.86, outperforming the estimated $1.50.
However, sales within its crucial Amazon Web Services (AWS) cloud segment fell slightly short of expectations, reaching $28.79 billion compared to the anticipated $28.82 billion. Furthermore, the company's guidance for the initial quarter of 2024 proved less optimistic than anticipated, with projected revenue ranging from $151 billion to $155.5 billion, falling short of Wall Street's forecast of $158.64 billion.Amazon attributed this conservative guidance to an anticipated unfavorable impact of approximately $2.1 billion, or 150 basis points, stemming from foreign exchange rates. The company emphasized that this projection takes into account an unusually large impact from currency fluctuations. They also reminded investors that in the first quarter of 2024, the inclusion of an extra day due to the leap year added approximately $1.5 billion in net sales.Operating profits also missed expectations. Despite the positive revenue figures, the company's stock experienced a decline of up to 5% immediately following the earnings announcement before recovering some of the losses. Amazon's stock closed 1% higher on Thursday, demonstrating resilience despite the initial dip. Year-to-date, the shares have appreciated by almost 9%, outperforming the S&P 500's 3% gain. During the earnings call, analysts focused on key areas such as the return on AI investments, AWS demand, and emerging sectors like robotics, seeking insights into these crucial areas of Amazon's business.
AMAZON EARNINGS REVENUE GUIDANCE STOCK PRICE AWS AI ROBOTICS FOREIGN EXCHANGE
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