Shares of Amazon.com Inc. experienced a decline of approximately 4% during after-hours trading on Thursday and have dropped by roughly 3% in pre-market trading on the Nasdaq. This decline follows Amazon's forecast of slower sales growth for the first quarter compared to the fourth quarter, negatively influenced by significant foreign exchange impacts. These projections contrast with its reported higher-than-expected earnings and strong sales growth in the fourth quarter.
According to The Wall Street Journal, Amazon's sales forecast was weaker than anticipated.
During the earnings call, Amazon's President and CEO, Andy Jassy, commented on the company's outlook: "As we look to 2025 and beyond, we see opportunities to further reduce costs by enhancing inventory placement, expanding our same-day delivery network, and accelerating the integration of robotics and automation throughout our operations. In our advertising division, we are satisfied with the substantial growth achieved on an already large base."
For the upcoming first quarter, Amazon projects its operating income to range between $14.0 billion and $18.0 billion, in comparison to $15.3 billion for the same quarter in 2024. The company anticipates net sales to fall between $151.0 billion and $155.5 billion, reflecting a growth of 5% to 9% year over year.
Wall Street analysts, on average, predict the company's revenue for the next quarter to be around $154.06 billion, with their estimates typically excluding special items.
Amazon's guidance includes the expectation of an unusually large adverse effect amounting to approximately $2.1 billion, or 150 basis points, due to foreign exchange rate fluctuations. Additionally, the effect of Leap Year in the first quarter of 2024 contributed approximately $1.5 billion to net sales.
In its fourth-quarter report, Amazon reported a net income of $20.004 billion, or $1.86 per share, up from $10.624 billion, or $1.00 per share, in the same period last year. This exceeded analyst expectations, who had anticipated earnings of $1.48 per share.
During the quarter, Amazon's operating income surged by 61% year-over-year to $21.2 billion. The company's net sales for the period increased by 10.5% to $187.79 billion from $169.96 billion the previous year. On a constant currency basis, net sales rose by 11%.
North American segment sales grew by 10% year-over-year to $115.6 billion, while international segment sales increased by 8% year-over-year to $43.4 billion, or 9% in constant currency terms. AWS segment sales saw a 19% year-over-year increase to $28.8 billion, achieving an annualized revenue run rate of $115 billion.
On Thursday, Amazon shares closed regular trading on the Nasdaq at $238.83, marking a 1.13% rise. Post-earnings report, the shares declined by 4.05% in after-hours trading. Currently, in pre-market sessions, the shares stand at $232.65, reflecting a decrease of 2.6%.
