Amazon's sales jumped in the last quarter, but it missed analyst targets

Courtney Goldsmith
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Amazon missed some analyst targets in the fourth quarter
Amazon missed some analyst targets in the fourth quarter (Source: Getty)

Online retail giant's share price fell four per cent in after-hours trading as operating income and revenue for the fourth quarter fell lower than expected.

The figures

Amazon reported a 22.4 per cent increase in its fourth-quarter revenue, driven by strong sales in the holiday period and increased Prime subscriptions.

Net sales were up to $43.74bn (£34.9bn) in the period to 31 December from $35.75bn the previous year. This was slightly below analyst predictions of $44.68bn, according to Reuters.

The world's largest online retailer said net income rose to $749m, or $1.54 per share, from $482m, or $1 per share, in 2015.

Revenue from Amazon Web Services, the company's cloud services business, missed analyst estimates of $3.6bn despite jumping 47 per cent to $3.54bn, according to market research firm FactSet StreetAccount.

Why its interesting

Last month, Amazon said the 2016 holiday was its best-ever shopping season, when it shipped 50 per cent more items than the prior year for third-party vendors.

Amazon spent heavily on buying up new warehouses and increasing its original video offerings, which hit operating income.

Read more: Amazon to open massive new London warehouse

As part of its push for faster delivery times, the company said last month it would create more than 100,000 jobs in the United States.

What Amazon said

Founder and chief executive Jeff Bezos said Prime reeled in "tens of millions" of new paid members in the past year as the company added more benefits to the programme.

He said:

“Prime members can now choose from over 50m items with free two-day shipping — up 73 per cent since 2015. Prime Video is now available in more than 200 countries and territories.

"Prime Now added 18 new cities, which means millions more members now get one and two hour delivery. New benefits were also added to the list, like Prime Reading, Audible Channels for Prime, Twitch Prime and more."

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