:max_bytes(150000):strip_icc()/INV_AmazonBuilding_GettyImages-1630713529-f33598b1e16e46acb237f0b047b70fdb.jpg "What You Need to Know Ahead of Amazon’s Earnings Report on Thursday")
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.