Amazon Reports Stellar Q4 Earnings but Weak Q1 Guidance Looms

Amazon's Q4 2024 earnings showed a significant increase, beating estimates. However, weakness in Q1 guidance raised concerns among investors. The stock fell over 4% in after-hours trading.

Date: 08-02-2025

AI Rating: 6

Earnings Per Share (EPS)
Amazon's EPS for the fourth quarter of 2024 was reported at $1.86, representing an impressive 84.2% increase compared to the same quarter last year. This figure exceeded the Zacks Consensus Estimate by 22.37%.

Net Income
The company's net income significantly rose to $20 billion in Q4 2024, up from $10.6 billion in the year-ago quarter, indicating strong financial performance.

Revenue Growth
Amazon reported net sales of $187.8 billion, reflecting a 10% year-over-year increase. This result was within the company's guidance and slightly beat the Zacks Consensus Estimate by 0.28%. The growth was attributed mainly to the success of its AWS segment and solid demand for its services.

Free Cash Flow (FCF)
Free cash flow improved to $38.2 billion for the trailing twelve months, up from $36.8 billion in the previous period, showcasing strong cash generation practices.

Operating Income
Operating income increased to $21.2 billion for the fourth quarter, compared to $13.2 billion a year ago. The effective management of operating expenses, which rose by 6.3%, contributed to this positive outcome.

Concerns
Despite these strong figures, Amazon's shares fell over 4% in after-hours trading due to less-than-ideal first-quarter guidance. The company forecasted net sales between $151 billion and $155.5 billion, attributing potential shortfalls to foreign exchange impacts and other external factors. This cautious outlook likely dampens immediate investor sentiment, causing a potential decrease in stock prices. Investors may view this as a sign to reevaluate their holdings, particularly in light of ongoing geopolitical tensions and economic uncertainties.

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