Amazon Q4 Earnings Beat Expectations Despite Growth Slowdown Concerns
Amazon surpasses fourth-quarter profit and revenue estimates, but its stock drops over 5 percent after warning of increased investments and slower international growth in 2019.
Amazon reports better-than-expected fourth-quarter results, earning $6.04 per share on $72.4 billion in revenue. Strong holiday sales drive this performance, with Amazon Web Services also beating estimates by generating $7.43 billion. However, the company's stock drops more than 5 percent in after-hours trading as investors worry about broader growth deceleration.
Chief Financial Officer Brian Olsavsky warns that investments increase significantly in 2019 after a period of scaled-back spending in 2018. The company experiences its slowest sales growth since early 2015, while the integration of Whole Foods shows only a 6 percent revenue increase. This slower growth at Whole Foods contributes to an overall drop in North American expansion rates.
International sales growth slows drastically to 15 percent compared to 29 percent in the previous year. A major factor in this international uncertainty involves new regulations in India that prevent foreign online retailers from selling products through affiliated companies. Amazon faces significant questions about how these regulatory changes impact its Indian operations, which adds to the disappointing first-quarter guidance.