Amazon’s Record Earnings in 2023 Propelled by Strong Fourth-Quarter Results

Amazon (AMZN) recorded its highest annual performance last year, propelled by strong fourth-quarter results.

Amazon’s net sales for the fourth quarter were $169.9 billion, a 13.9% increase from the previous year. The company’s operating profit also saw a significant surge of 382.6% to $13.2 billion in the prior year. In the fourth quarter, the company achieved an earnings per share (EPS) of $1.00. Thanks to its continued performance improvement throughout the year, Amazon recorded its highest annual sales and operating profit in 2023.

Regarding revenue growth, the North American, overseas, and AWS businesses all experienced increases of 13%, 17%, and 13%, respectively. This further demonstrates strong quarterly performance. The North American business recorded an operating profit margin of 6.1% in the fourth quarter and 2.6% annually, proving its position as the top online platform operator with a strong level of profitability.

According to Shin Young Securities analyst Seo Jeong Yeon, the North American business of the company has shown significant growth. This is in consideration of the fact that the transaction volume of the US e-commerce market grew cumulatively by approximately 7.5% in the third quarter of last year.

In the fourth quarter, the AWS division witnessed a significant increase of approximately 38% in its operating profit compared to last year. This growth in profit, along with the North American business, is believed to have contributed to the overall improvement in the company’s operating profit. It is worth noting that the third quarter also saw a substantial increase of 29%.

This upward trend in performance is expected to continue through the first half of the year.

According to researcher Seo Jeong Yeon, e-commerce is regaining profitability by reducing costs and enhancing delivery competitiveness. She also suggests that in the future, the main factors contributing to a company’s corporate value will be its AWS business powered by AI and data migration services for other companies. Additionally, the Bedrock generative AI product launched last year is being highlighted again as a new growth engine for AWS.

In addition, the potential for stabilizing interest rates, which had burdened the downward stock prices of big tech platform companies, is also cited as an additional expectation factor.

Researcher Seo said, “The stock price has risen sharply, but the performance improvement will continue until the first half of the year.”