Amazon Fourth Quarter Earnings Report Shows Sales Up 21 Percent

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Amazon.com, Inc. announced financial results for its fourth quarter ended December 31, 2019.

Operating cash flow increased 25% to $38.5 billion for the trailing twelve months, compared with $30.7 billion for the trailing twelve months ended December 31, 2018.

  • Free cash flow increased to $25.8 billion for the trailing twelve months, compared with $19.4 billion for the trailing twelve months ended December 31, 2018.
  • Free cash flow less principal repayments of finance leases and financing obligations increased to $16.2 billion for the trailing twelve months, compared with $11.6 billion for the trailing twelve months ended December 31, 2018.
  • Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to $12.5 billion for the trailing twelve months, compared with $8.4 billion for the trailing twelve months ended December 31, 2018.

Common shares outstanding plus shares underlying stock-based awards totaled 512 million on December 31, 2019, compared with 507 million one year ago.

Fourth Quarter 2019 Financial Highlights

Net sales increased by 21% to $87.4 billion in the fourth quarter, compared with $72.4 billion in fourth-quarter 2018.

Excluding the $120 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 21% compared with fourth-quarter 2018.

Operating income increased to $3.9 billion in the fourth quarter, compared with operating revenue of $3.8 billion in fourth-quarter 2018.

Net income increased to $3.3 billion in the fourth quarter, or $6.47 per diluted share, compared with net income of $3.0 billion, or $6.04 per diluted share, in fourth quarter 2018.

Full-Year 2019 Financial Highlights

Net sales increased 20% to $280.5 billion, compared with $232.9 billion in 2018. Excluding the $2.6 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 22% compared with 2018.

Operating income increased to $14.5 billion, compared with operating revenue of $12.4 billion in 2018.

Net income increased to $11.6 billion, or $23.01 per diluted share, compared with net income of $10.1 billion, or $20.14 per diluted share, in 2018.

“Prime membership continues to get better for customers year after year. And customers are responding — more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world.”

“We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year.”

 

Jeff Bezos, Amazon founder and CEO

Amazon Select Operating Highlights

  • During this holiday season, customers ordered billions of items worldwide, including tens of millions of Amazon devices. Best-selling devices this holiday were Echo Dot, Fire TV Stick 4K with Alexa Voice Remote, and Echo Show 5.
  • Independent third-party sellers — mostly small and medium-sized businesses — sold more than a billion items during the holiday season, including more than 100 million items shipped with Prime Free One-Day Delivery. Amazon also announced nine winners of the Small Business Spotlight Awards in the U.K., Germany, and the U.S., including Small Business of the Year winners Gamely Games in the U.K., Snocks in Germany, and nutpods in the U.S.
  • Amazon announced that free returns can now be made at more than 18,000 drop-off locations in the U.S., including Amazon Books and Amazon 4-star stores, Amazon Hub locations, Kohl’s, select Whole Foods Market stores, UPS, and more. In support of Amazon’s commitment to sustainability, more than 5,800 locations now offer label-free and box-free returns, limiting the amount of packaging used.
  • This holiday season, Amazon surprised hundreds of charities across the U.S. by donating hundreds of thousands of items from their AmazonSmile Charity Lists, including more than 5,000 blankets, sheets, and pillows; more than 30,000 toys and educational items for kids; more than 40,000 apparel items; and more than 60,000 pantry items.
  • Amazon announced there are now hundreds of millions of Alexa-enabled devices in customers’ hands, and customers interact with Alexa billions of times each week. Customers rely on Alexa to control smart home devices hundreds of millions of times each week and can enjoy new features, including the ability to pause or resume Wi-Fi access in their home using voice.
  • Ring announced several new products and features, including additions to its smart lighting lineup and the all-new Control Center, a new, easy-to-use dashboard where customers can view and control privacy and security settings. Ring also launched Ring Alarm in the U.K., as well as the all-new Indoor Cam and Stick Up Cam in several countries such as Canada, Australia, New Zealand, the U.K., France, Germany, Italy, and Spain.
  • Since launching Prime in September, Brazil has seen the fastest growth in paid Prime members in Amazon’s history. Selection on amazon.com.br continues to expand and now includes millions of items, and in December the country opened its fourth fulfillment center to support growth. Additionally, Prime Video announced four new original productions for 2020 and will debut All or Nothing: Brazil National Football Team on January 31st.
  • Amazon pledged to invest $1 billion to help digitize traders and micro, small, and medium-sized businesses (MSMBs) across India, intending to bring more than 10 million MSMBs online by 2025. Today, there are more than 550,000 sellers on the Amazon India marketplace, more than 60,000 Indian manufacturers and brands are exporting their “Make in India” products to customers worldwide on Amazon, and we expect our new $1 billion investment to enable $10 billion in cumulative Indian exports by 2025.
  • Since launching Amazon.in in 2013, Amazon has created more than 700,000 direct and indirect jobs in India. In January, Amazon announced plans to create an additional one million jobs in India by 2025, with continued investments in technology, infrastructure, and logistics. Since 2014, Amazon has grown its employee base more than four times, and last year inaugurated its new campus building in Hyderabad — Amazon’s first fully-owned campus outside the United States and the largest building globally in terms of employees and space.
  • Amazon India announced it will have 10,000 electric vehicles in its delivery fleet by 2025. This investment is part of Amazon’s recent co-founding of The Climate Pledge, a commitment to meet the Paris Agreement 10 years early by achieving net-zero carbon emissions by 2040.
  • Amazon Business launched in Canada and now serves commercial and public sector organizations of all sizes in Canada and eight other countries, including the U.S., U.K., Germany, France, Italy, Spain, Japan, and India. Amazon Business also launched Business Prime in Canada. Business Prime offers member-only benefits to help save time and money, in addition to unlimited fast, free shipping on eligible items for every member on the account.
  • Amazon announced that delivery through Amazon Fresh, which was previously $14.99 a month, is now a free benefit for Prime members. Members in more than 2,000 U.S. cities and towns can access free two-hour grocery delivery from Amazon Fresh and Whole Foods Market. Grocery delivery orders from Amazon Fresh and Whole Foods Market more than doubled in the fourth quarter year-over-year.

Full Amazon Earnings Report, More Operating Highlights, and Full Disclosure Information

This report is an abbreviated version of the earnings report and is not intended for investment decision purposes. For the complete earnings report and all legal disclosures, please follow this link.

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