December Quarter Sees Amazon Rake in $72.4 Billion

April Davis By April Davis | 04 Feb 2019

Amazon has released its fourth quarter and full year 2018 figures, reporting a 20 percent increase in sales for the period ending December 31, 2018.

According to Amazon’s latest results statement, the business increased its operating cash flow by 67 percent in 2018, bringing its total to $30.7 billion compared with only $18.4 billion in 2017.

Notably, the online juggernaut has reportedly boosted its net sales by 20 percent to $72.4 billion in Q4 compared to only $60.5 billion in Q4 2017. The company has pointed out, however, that its boost in net sales for the quarter has been calculated excluding the “$801 million unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter.” Operating income was also up to $3.8 billion or $6.04 per diluted share compared to $1.9 billion or $3.75 per diluted share in 2017.

Full Year 2018 Results

Looking at the full 12-months, Amazon has reported a net sales increase of 31 percent to $232.9 billion compared to its $177.9 billion in 2017. Meanwhile, operating income jumped from $4.1 billion in 2017 to $12.4 billion in 2018.

Not surprisingly, Amazon has published a long list of achievements from 2018, citing its reputable brand image, wage increases, environmental commitments and updated shipping methods as reasons for its success over the last 12-months.

Worldwide, more people in 2018 signed up for Prime than ever before, with SMB’s reportedly having profited from strong trade over the busy Christmas period. Over the holiday season, 50 percent of all products sold came from an SMB seller, which Amazon says is a reflection of its commitment to assisting small businesses. The company has backed up this statement by saying “third party sales are growing faster than first-party sales, and nearly 200,000 small and medium-sized businesses surpassed $100,000 in sales in Amazon’s stores in 2018.”

However, the company has reserved the bulk of its praise for its devices, hailing Alexa-powered products such as the Echo Dot as a key driver of sales during the December quarter.

“Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year,” said Jeff Bezos, Amazon’s founder and CEO.

Bezos says that 2018 saw more research scientists working on Alexa, which has resulted in overall improvements to the AI-tech.

“In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20 percent through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017,” Bezos said.

Amazon’s Plans for FY19

As part of its release, Amazon has set its first-quarter 2019 profit guidance, with net sales for the quarter expected to reach between $56 and $60 billion, representing growth of ten to 18 percent compared to Q1 2018. These figures have reportedly factored in unfavourable impact of roughly 210 basis points from fluctuations in foreign exchange rates.

Operating income is also expected to increase from Q1 2018, with the company projecting the first quarter of 2019 to see operating income fall between $2.3 and $3.3 billion.

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