Amazon quarterly sales rise 9% as AWS profit slips

Amazon reported higher holiday-quarter sales but lower profit on 2 February. Its fourth-quarter results show revenue of US$149.2 billion, up 9% from a year earlier, while AWS operating profit declined.

Historical Amazon premises, photographed in 2017. Photo © Tony Webster (2018), “Amazon Fulfillment and Trucks Sign – Shipping Center in Shakopee, Minnesota”. CC BY 2.0. Resized; responsive crops.

AWS revenue rose 20% to $21.4 billion. Its operating profit slipped to $5.2 billion from $5.3 billion, and its operating margin narrowed to 24.3% from 29.8%. North America and International both posted operating losses, leaving AWS as Amazon’s only profitable reporting segment.

Amazon’s group operating profit fell to $2.7 billion from $3.5 billion for the quarter. It included roughly $2.7 billion of charges covering severance, asset and lease impairments, and revised self-insurance estimates, mainly affecting North America.

Quarterly net income was $278 million, compared with $14.3 billion a year earlier. The comparison includes a $2.3 billion pre-tax loss on the value of Amazon’s Rivian investment, against an $11.8 billion gain a year earlier. Those investment revaluations sit outside operating profit.

For the full year, revenue rose 9% to $514 billion, while Amazon recorded a $2.7 billion net loss, including a $12.7 billion pre-tax Rivian valuation loss. AWS’s annual revenue rose 29% to $80.1 billion, with operating profit of $22.8 billion.

For the first quarter of 2023, Amazon forecasts group revenue of $121 billion to $126 billion, representing growth of 4% to 8%, and operating profit between zero and $4 billion. The forecast assumes no additional acquisitions, restructurings or legal settlements.