The growth momentum seemed to be slowing down. Amazon has had a comparatively unspectacular year and has dropped from first to fifth place on Wall Street, overtaken by stock market newcomer Saudi Aramco, but also, and above all, by tech and Internet rivals: Apple, Microsoft, and Alphabet have overtaken the Seattle e-commerce pioneer in recent months.
The fact that Wall Street Amazon was presumably too critical last year is now made clear by the presentation of the latest business balance for the past Christmas quarter, in which the Internet pioneer pulverized analysts’ expectations after every reading.
Already higher turnover than Apple
Between the beginning of October and the end of December, Amazon already turned over 87.44 billion dollars – Wall Street had only expected proceeds of 86.02 billion dollars. Compared to the same period of the previous year, when Amazon had generated sales of 72.4 billion dollars, sales still rose by 21 percent.
The e-commerce giant was able to increase the revenues of 232.9 billion dollars achieved in the previous year to 280.5 billion dollars. Amazon is now turning over more than Apple.
Amazon posts record profit
The profits of the Internet dinosaur, which CEO Jeff Bezos had long renounced in favor of growth, also continued to rise. After a surplus of 3.0 billion dollars in the same period last year, Amazon was able to report a net profit of 3.27 billion dollars (an increase of eight percent) or 6.47 dollars per share in the fourth quarter of 2019, thus very clearly exceeding analysts’ expectations, which were at 4.03 dollars per share.
This was Amazon’s 15th consecutive quarter of profit and also the largest in the Group’s history. In 2019 as a whole, the world’s second most valuable Internet group by the alphabet earned a net profit of 11.6 billion dollars – more than ever before.
AWS continues to grow by 34 percent
The driving force behind the business dynamics was once again the rapidly growing cloud computing division AWS (Amazon Web Services), which still grew by 34 percent compared to the same period last year ($7.4 billion) and now already generated more than $9.95 billion (expectations: $9.81 billion). AWS continues to be Jeff Bezos’ cash cow: The Cloud Division is generating the lion’s share of the Group’s profit with an operating profit of 2.6 billion dollars.
In his accompanying statement, CEO Jeff Bezos emphasized the great success of the Prime premium program. “More users than ever before have become Prime members,” explained the 56-year-old, revealing that 150 million people are already using the premium service, which costs 69 euros a year in Germany.
Advertising segment grows by 41 percent
The advertising business also continues to boom. In the “other activities” segment, which consists primarily of advertising, revenues rose by a further 41 percent – and thus faster than Facebook’s advertising revenues – to a current level of 4.8 billion dollars. For the year as a whole, Amazon already achieved advertising revenues of 14 billion dollars.
Compared to the previous year, this is an increase in revenue of more than four billion dollars in a secondary business that hurts media companies in particular: For publishers, the advertising market, in which the Internet trio Google/ Facebook/Amazon is becoming increasingly dominant, is thus becoming correspondingly tighter.
Share at all-time highs – Amazon again with a trillion-dollar valuation
Meanwhile, on Wall Street, Amazon’s latest figures sparked a price fireworks display. The share, which had been trading in a narrow range over the past six months, broke out after the close of trading with a price jump of 13 percent at its peak.
The e-commerce pioneer experienced the greatest increase in value in its 23-year stock market history due to the post-trading price explosion of over 200 dollars per share. The stock market value increased by more than 100 billion dollars and broke through the trillion-dollar mark for the first time since last July. Amazon also jumped to a new all-time high with quotations of almost 2100 dollars. As a result, Jeff Bezos’ net assets alone rose by 12 billion dollars.