Amazon
Overall, Amazon's shares were down by about 25% at last Monday's lows, and it's recovered about a third of its losses with this recent gain. The company is facing several bearish tailwinds such as higher costs as it looks to invest in its logistics infrastructure and transportation network and higher hundreds of thousands of workers, rising rates with the Federal Reserve's hawkish stance, and a slowdown in e-commerce spending as the economy normalizes.
Inside the Numbers
Prior to this earnings report, Amazon's stock had fallen by 7% following Facebook's
Earnings per share handily beat expectations at $5.80 vs expectations of $3.57 per share. Revenue fell short of expectations at $137.4 billion vs $137.6 billion expected. However, AWS revenue beat at $17.8 billion vs $17.37 billion.
In terms of guidance for Q1, Amazon sees revenue between $112 billion and $117 billion which is below estimates of $120 billion, and operating profit is forecast to be in the range of $3 billion to $6 billion.
Amazon also broke out its advertising revenue for the first time which grew 32% to reach $9.7 billion. This makes Amazon the third-largest ad company in the U.S. behind Google
The company said that the pandemic continues to pose challenges especially as it looks to increase its workforce amid a tight labor market. To that end, Amazon increased wages to an average of $18 an hour and has offered generous bonuses such as free college and signing bonuses worth as much as $3,000 in some markets.
The company also increased the price of its Prime membership to $139 from $119. The cost of the monthly Prime membership will also increase to $14.99 from $12.99.
AWS grew 40% to reach $17.8 billion. This growth wasn't surprising as Google and Microsoft
