Amazon value tops $1trn again as it smashes Wall Street forecasts Online giant’s Prime service breaks through 150 million subscription barrier in final three months of 2019

Amazon.com smashed Wall Street forecasts on Thursday night after posting a 21 per cent increase in the net sales in the final three months of last year following strong Christmas sales as well as the transition of Prime from two days to one day.

Sales for the quarter hit $87.4bn (£66.75bn), above analysts’ predictions of $85.96bn, while profit hit $3.3bn, or $6.47 a share, some way above forecasts of $4.03. At the same point last year profit came in at $3bn.

Amazon shares leapt more than 12 per cent following the positive numbers, sending the value of the company back over the $1trn mark.

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Bezos hails Prime subscription growth

Revenue from subscription services, of which Amazon Prime is the main part, were up 32 per cent to $5.24bn.

Jeff Bezos, Amazon’s founder and chief executive, said: “Prime membership continues to get better for customers year after year. And customers are responding — more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world.

“We’ve made Prime delivery faster — the number of items delivered to US customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year. Members now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns.

“Prime members watched double the hours of original movies and TV shows on Prime Video this quarter compared to last year, and Amazon Originals received a record 88 nominations and 26 wins at major awards shows. A huge thank you to teams across Amazon for their dedicated work to build, innovate, and deliver for customers this holiday.”

Mr Bezos added the company expects first-quarter sales to be in the range of $69bn to $73bn and operating income between $3bn and $4.2bn, which represents a reduction from $4.2bn reported in the prior year period.

Cloud services growth slows

However, Amazon Web Services (AWS) growth continued to slow. In the second quarter of 2019, AWS growth fell 37 per cent, the first time it had fallen below 40 per cent. In the fourth quarter growth in the business slowed further to 34 per cent

AWS is the world’s leader in the cloud computing, ahead of Microsoft Azure and Google Cloud.

Sales at Amazon’s advertising business rose 41 per cent to $4.78bn, and the group noted that during the Christmas period, the best selling Amazon devices were Echo Dot, Fire TV Stick 4K with Alexa Voice Remote, and Echo Show 5.

Earlier this week, fellow tech giant Apple reported positive results, riding on strong demand for iPhone 11. However, Facebook shares suffered as it reported growth had slowed.