Amazon sales outlook falls short after record holiday quarter

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Amazon sales outlook falls short after record holiday quarter

Amazon reported strong Q4 2018 revenues in all parts of its business on Thursday afternoon.

Overall, net sales for the fourth quarter rose 19.7 per cent to US$72.38-billion and beat the analyst average estimate of US$71.87-billion on the back of a strong holiday season, which includes the major USA shopping event Black Friday.

Market capitalization. Grew to $840 billion Thursday afternoon, more than Microsoft, Apple, or any other publicly traded company.

Sales are up from $5.11 billion a year ago, to $7.43 billion today, even beating analysts estimates which expected $7.29.

At the beginning of previous year, eMarketer predicted Amazon would only do $2.8 billion in ad sales.

In the fourth quarter, Amazon's biggest of the year, revenue rose 20 percent to $72.4 billion.

The advertising business posted $3.4 billion in revenue, almost double from a year earlier. The machine learning platform service Amazon SageMaker also had additional machine learning model development capabilities launched, namely, the AWS DeepRacer, which is a 1/18th scale fully autonomous race auto and can be supplied with codes that make it fully autonomous and the AWS Marketplace for Machine Learning, where developers can sell their work and use over 150 algorithms and models deployed directly to the Amazon SageMaker. Its reach extends all across the web, with its own e-commerce site, IMDb, Twitch and a network of outside publishers that run its ads. The online retailer's brick-and-mortar strategy also includes bookstores and a cashierless convenience store called AmazonGo, which lets customers check in with a smartphone app and be charged automatically based on what they remove from the store. Brands are finding ways to play across all these properties.

"Amazon will now need to work doubly hard to achieve any future sales gains".

"In our view, the gap between Amazon and the rest is now narrowing", he said.

The results reflected growth in Amazon's ever-expanding online retail operations as well as its large cloud computing division, known as Amazon Web Services.

In the third quarter, Amazon pulled in US$2.9 billion in quarterly profit, with sales that climbed almost 30 per cent to US$56.6 billion.

The company reported its third record profit in a row, capitalizing on a strong holiday retail season and its growing, high-margin businesses such as cloud computing and advertising.

One of the main gripes of Amazon's ad business is that the products are still less sophisticated than rivals' technology. Amazon has not fully rolled out an attribution program it tested a year ago, which let advertisers detect when their digital ads led to sales on its site.

On a 30-minute earnings call with analysts, Bezos' planned split from wife MacKenzie never came up - despite brewing concerns over how the couple of 25 years might divide up their 16 percent stake in Amazon and whether Bezos' role in the company could change as a result.

Amazon has become so important to the advertising industry because of its dominance in e-commerce.

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