Amazon’s doubling profits last December beat the analyst expectations and calmed the Wall Street concerns, who felt the online retail giant was headed for a decline.
“Amazon posted profit that topped expectations, led by its cloud-computing division, calming investor concerns about slowing online sales growth and rising fulfillment costs”, Bloomberg Tweeted today.
For the last three months of 2021, Amazon stocks reported a profit of $US14.32 billion, making a per-share profit of $US27.75, compared to the per-share profit of $14.09 in the previous year’s initial quarters.
With this profit, the company’s overall revenue rose by 9 percent ($US137.4 billion), making the fifth year in a row for revenue topping.
Despite labor shortages and supply chain disruption due to pandemics, Amazon stocks brought sky-touching revenues because of Behemoth’s cloud computing unit. Not just that, the investor celebrated the hike in Amazon Prime’s subscription division. In extended trading, the company shares rose by 18 percent.
Back in Last year October, Amazon warned the investors that the company would spend more during the Christmas and New Year period to serve their customers worldwide and make up for the slow service times due to supply chains bottlenecks and labor shortages caused by the pandemic.
To keep up with the service demand for the season, Amazon extensively hired laborers and provided hiring bonuses to the staff, and secured spaces on any cargo they could find. However, a total, of $US22.4 billion fulfillment expense was incurred, which was below the company’s expectations.
“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron,” said CEO Andrew Jassy who replaced the Amazon founder, Bezos. “Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic.”
Jeff Bezos is currently serving as an executive chairman of the company.
Amazon was one of the fortunate platforms that flourished during the pandemic as buyers switched to online shopping after the closure of brick-and-mortar stores.
However, later, as people started getting vaccinated, they felt more comfortable shopping from physical stores and with global supply chains, issues affected the company’s revenue.