(Reuters) – Amazon.com Inc. (NASDAQ 🙂 on Thursday forecast first-quarter sales below one of its key growth markets, dimming the online retailer's report or record holiday season profit.
Shares of the company fell 1.7 percent to $ 1,690 after the bell
Amazon posted a 63 percent jump in net income to $ 3.03 billion for The fourth quarter ahead of analysts' estimates
The company has used fast shipping and streaming video to attract shoppers, creating an e-commerce powerhouse. Fees merchants pay Amazon to ship and advertise their products with the company's once-thin profit margin.
Yet investors turned their attention abroad where Amazon has lost money in the hopes of future profit. Though its operating loss shrunk to $ 642 million from $ 91[ads1]9 million in the quarter, rules in India created concern. These disallow companies from selling products through vendors in which they have an equity interest.
Brian Olsavsky, Amazon's chief financial officer, said on a call with reporters, the "situation in India is a bit fluid right now." "There's a bit of uncertainty," he said, adding that Amazon's goal is to minimize the impact on its customers and sellers. "India remains a good long-term opportunity," he said.
The company launched a wide array of products from its India website late on Thursday. 1, Reuters reported
The company forecast net sales of between $ 56 billion and $ 60 billion for the first quarter, missing the analyst average estimate or $ 60.77 billion, according to IBES data from Refinitive.
Olsavsky said the guidance includes two % points of negative impact from changes in currency exchange rates
Overall, net sales for the fourth quarter rose 19.7 percent to $ 72.38 billion and beat the analyst average estimate of $ 71.87 billion on the back of a strong holiday season, which includes the major US shopping event Black Friday.
"Amazon continued its relentless assault on the high street over Christmas," Nicholas Hyett, Equity Analyst at Hargreaves Lansdown (LON 🙂 said.
Net sales in North America, its biggest market, jumped 18.3 percent to $ 44.12 billion in the reported quarter. International revenue came in a touch above expectations, too.
Amazon said tens of millions of shoppers signed up for Prime during the season, helping boost revenue from subscription fees 25 percent to $ 4.0 billion. The company has more than 100 million Prime members globally.
This expansive customer base has lured merchants to sell goods on the company's marketplace, to the point where more than half of products sold on Amazon came from third parties earlier last year. 19659004] Making Amazon more profitable still. The company now ranks alongside Alphabet (NASDAQ 🙂 Inc's Google and Facebook Inc. (NASDAQ 🙂 as titans in marketing, letting these same merchants pay for high placement in Amazon's search results.
Ad sales and " Other "revenue jumped 95 percent to $ 3.4 billion in the fourth quarter.
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