Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily

No Silver Lining In Amazon's Cloud Business As Results Fail To Excite

Amazon stock was down in premarket trading Friday following its fourth-quarter results that beat on revenue but missed on earnings, as its typically strong cloud computing unit failed to rescue the e-commerce giant.

Amazon reported adjusted earnings of 3 cents a share on revenue of $149.2 billion. Meanwhile, analysts expected Amazon to report earnings of 17 cents a share on revenue of $145.7 billion.

Revenue climbed 9% from the year-ago period, and compared with 15% growth in the prior quarter.

The earnings report arrived late Thursday.

Sales for its cloud computing unit, Amazon Web Services, jumped 20% to $21.4 billion. Sales, however, fell slightly below expectations and dropped from 27.5% growth in the third quarter.

Outlook Falls Below Views

The company expects first-quarter revenue in the range of $121 billion to $126 billion, or growth of 4% to 8%. The midpoint of $123.5 billion is below the Wall Street's estimate of $125.13 billion.

AMZN stock plunged 8.4% to close at 103.39 on the stock market today.

Ad revenue climbed 19% to $11.6 billion, slightly ahead of estimates.

"In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon," Chief Executive Andy Jassy said in prepared remarks with the earnings release.

AMZN Stock: Large-Scale Layoffs

A challenging economic climate affecting e-commerce companies globally continues to weigh down the company's performance.

In January, Amazon confirmed it's laying off 18,000 workers, the largest cutback in its 28-year history. The layoffs are the largest at a major technology company thus far in a slew of cutbacks throughout the industry.

In addition to a weakening economy, a number of adverse effects worked against tech companies such as a sharp slowdown in digital ad spending, inflation, rising interest rates and growing recession fears.

AMZN stock plunged in late October after the company reported third-quarter results that beat on earnings. But Amazon gave an outlook that fell short of expectations.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.