Amazon reports first $100 billion quarter following holiday and pandemic shopping surge

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Amazon is set to announce its fourth-quarter earnings after the bell on Tuesday. 

Here’s what Wall Street is expecting:

  • Earnings: $7.23 per share forecast by Refinitiv
  • Revenue: $119.7 billion forecast by Refinitiv

If Amazon meets analysts’ expectations, it will be the first time the company books $100 billion in revenue in a single quarter. Apple hit the same milestone when it reported its holiday quarter earnings last week.

Analysts say Amazon is likely to post record revenue driven by continued accelerated e-commerce demand and the busy holiday shopping period. The quarter will also include the results of the company’s pandemic-delayed Prime Day, which was held in mid-October instead of July.

E-commerce sales remain robust as spending at U.S. retailers stumbled in the last month of 2020. Consumers turned to online retailers and stayed away from brick-and-mortar stores amid renewed lockdown measures to slow the spread of Covid-19. 

In December, Amazon said that it was experiencing a record holiday shopping season as of the Monday after Thanksgiving (Cyber Monday), while third-party sales grew more than 60% year-over-year to over $4.8 billion. 

Amazon’s Covid-related safety investments for employees will be an area of focus. Amazon warned investors in the third quarter that it would continue to invest in ramping its transportation and fulfillment capacity, hiring additional employees and making its facilities safe for workers, all to keep up with heightened consumer demand.

Those costs could eat into profitability in the fourth quarter. Amazon said its operating profit for the last three months of the year would be between $1 billion and $4.5 billion. 

Analysts anticipate that Amazon may have overstated the impact of those investments on its profits in the current period.

“While we believe Amazon’s guidance is sincere, we think it is overly conservative, and we cannot conceive that the company will spend all of its incremental gross profits on fulfillment, marketing, and COVID-related expenses,” Wedbush analysts said in a Jan. 28 note. 

Analysts will also be watching Amazon Web Services’ fourth-quarter results to see if they signal a reacceleration in cloud spend from hard-hit companies in sectors like travel and hospitality. 

This story is developing. Check back for updates.

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