Amazon stock surges, hits $1 trillion market cap
SEATTLE — Amazon stock was up more than 12% Friday morning after the company’s fourth-quarter earnings surged above expectations.
Net income for the fourth quarter, which ended on Dec. 31, increased to $3.3 billion, or $6.47 per share, compared with net income of $3 billion, or $6.04 per share, in the fourth quarter of 2018. Basic earnings per share grew to $6.58 from $6.18 in the fourth quarter of 2018.
Operating income increased to $3.9 billion for the fourth quarter, compared with operating income of $3.8 billion in the fourth quarter of 2018. Operating cash flow increased 25% to $38.5 billion for the previous 12 months, compared with $30.7 billion for the 12 months ended Dec. 31, 2018.
With the strong results, Amazon’s market cap rose above $1 trillion for the third time.
Amazon’s shipping costs have continued to increase to support the company’s move to same-day and one-day shipping, growing from $9 billion in the fourth quarter of 2018 to $12.9 billion in the current year’s fourth quarter – a 43% increase year-over-year.
“More people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world,” said Jeff Bezos, Amazon founder and CEO, in the earnings statement. “We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year.”
For the first quarter 2020, Amazon said it expects to report revenue between $60 billion and $73 billion.
In its quarterly earnings report, Amazon announced there are now hundreds of millions of Alexa-enabled devices in customers’ hands, adding that customers rely on Alexa to control smart home devices hundreds of millions of times each week, including the ability to pause or resume Wi-Fi access in their home using voice.
The company also said that independent third-party sellers, including mostly small and medium-sized businesses, sold more than a billion items during the recent holiday season, including more than 100 million items shipped with Prime’s free one-day delivery.
“We see the expansion of the one day program as we move through the year,” said Brian Olsavsky, Amazon CFO on the quarterly earnings call. “We started in 2Q of last year and have continually added additional cities, routes and zip codes. We will begin to see more one-day shipping internationally in 2020 with an improved selection in Europe and Japan.”