Quarterly report paints a mixed picture of Amazon

Photo by Bryan AngeloAmazon reported revenue growth of 9 percent to $137.4 billion for the final quarter of 2021, roughly in line with analysts' expectations. Net income nearly doubled to $14.3 billion, thanks to a special gain of $11.8 billion from the Rivian deal. Operating profit, meanwhile, nearly halved to $3.5 billion. Chief Executive Andy Jassy said in a statement that the company suffered from higher costs last quarter because of staff shortages and general inflation.

Amid those challenges, Amazon now announced it will raise the price of its Prime loyalty program for the first time since 2018, whose subscribers get faster shipping at no extra cost and access to a video service comparable to Netflix, among other benefits. In America, the annual fee for Prime is now being raised from $119 to $139. Netflix also recently announced a price increase here.

Amazon's weak point in the past quarter was online retail, which is all the more remarkable because the reporting period includes the important Christmas business. This time, sales here shrank by one percent to 66.1 billion dollars.

Once again, however, the Group impressed with its cloud division Amazon Web Services (AWS). It brought in sales of 17.8 billion dollars, 40 percent more than in the previous year; it was the strongest growth in several quarters. AWS provides computing capacity and related services to companies that want to move their information technology to the Internet.

The division's business has been more profitable than average. Operating profit rose 49 percent to $5.3 billion, higher than the group as a whole. That means all other divisions combined were in the red. AWS' handsome profits are also notable in that Google, one of the biggest competitors in the business, reported a loss for its cloud division this week.

For the first quarter of this year, Amazon predicts revenue of $112 billion to $117 billion. That was slightly below analysts' expectations and would represent growth of 3 percent to 8 percent over last year. So Amazon is bracing for another slowdown.



Photo by Bryan Angelo

 


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