What You Need to Know Ahead of Amazon’s Earnings Report on Thursday
- January 31, 2024
Key Takeaways
- Amazon.com Inc. is expected to show record quarterly revenue and a significant increase in net income and earnings per share when it reports fourth-quarter 2023 results Thursday.
- The tech giant’s growth has been fueled by the continued success of its AWS cloud computing segment, which has roughly doubled its net sales in three years.
- Meanwhile, Amazon faces a lawsuit from the Federal Trade Commission alleging it engages in anticompetitive practices to maintain a monopoly.
Amazon.com Inc. ( AMZN ) is expected to post record quarterly revenue and significant gains in earnings per share (EPS) and net income when it reports fourth-quarter 2023 earnings on Thursday after the stock market closes.
The tech giant, which ended the year with strong Amazon Web Services (AWS), retail, and advertising sales , is expected to reach a record-high $166.14 billion in net sales for the latest quarter, up 11.4% year-over-year (YOY) , according to estimates compiled by Visible Alpha.
Analysts expect the tech giant to report net income of $8.59 billion and EPS of 83 cents, up sharply from $278 million and 3 cents, respectively, in the prior-year quarter. Amazon’s fourth-quarter 2022 net income included a $2.3 billion pretax valuation loss related to its investment in Rivian Automotive Inc. ( RIVN ).
| Analyst Estimates for Q4 2023 | Q3 2023 | Q4 2022 | |
| Revenue | $166.14 billion | $143.08 billion | $149.2 billion |
| Earnings Per Share | 83 cents | 96 cents | 3 cents |
| Net Income | $8.59 billion | $9.88 billion | $0.28 billion |
Key Metric: AWS Sales
A key metric investors should watch for is Amazon’s net sales for AWS, the company’s cloud computing segment. AWS is to some degree a measure of Amazon’s success in navigating the recent surge in interest in artificial intelligence (AI) . It is also one of the company’s fastest-growing business lines, with sales roughly doubling in the last three years.
Analysts predict that AWS net sales will climb by about 13% YOY to a record $24.17 billion.
Business Spotlight
In late September 2023, the Federal Trade Commission (FTC) filed a lawsuit against Amazon, alleging that the company uses “anticompetitive and unfair strategies to illegally maintain its monopoly power.”
In the last months of the year, the company also contended with a proposed consumer class action accusing the company of failing to meet its stated “guaranteed” delivery times for some items. The company fought back in December, asking a U.S. judge to throw out the potential lawsuit.
As of midday Tuesday, Amazon stock had gained 59% over the past year.