SEATTLE, United States — Amazon.com Inc. reported the strongest holiday quarter sales growth in eight years, fuelled by the company’s dominance in e-commerce and cloud computing even as it pushes into new businesses such as advertising, entertainment and groceries.
The results reassured investors that Amazon’s spending on its various initiatives poses no threat of distractions to its main businesses. Revenue growth is accelerating even as the company is expected to cross $200 billion in sales this year.
The e-commerce giant also gave a revenue forecast of $47.8 to $50.8 billion for the current quarter, compared with analysts estimates of $48.7 billion, according to data compiled by Bloomberg.
Sales gained 38 percent to $60.5 billion in the fourth quarter, the Seattle-based company said Thursday in a statement. Net income was $1.9 billion, or $3.75 per share. Analysts projected earnings of $1.83 per share on sales of $59.8 billion. Amazon said the earnings included a $789 benefit in the quarter as a result of the new U.S. tax law.
Shares rose about 2 percent in extended trading after closing at $1,390 in New York. The stock has leaped 67 percent in the past 12 months.
Amazon consistently delivers big sales gains and plows most of the money back into the company. It equips warehouses with robots, builds new data centers, invents new products and updates devices like its voice-activated Echo digital speaker, which Amazon sees as key to getting a foothold in customers homes and vehicles.
The e-commerce giant spent $13.7 billion last year on the 460-store Whole Foods grocery chain to become a more serious player in the $800 billion grocery market and enter a brick-and-mortar retail business dominated by Wal-Mart Stores Inc. It added more than 200,000 workers in the first nine months of 2017 and it keeps expanding its international reach, with operations in India, Australia and Latin America. Amazon last week unveiled the plant-filled centerpiece of its new $4 billion downtown Seattle office project and is considering 20 cities as the location for a second U.S. headquarters expected to cost $5 billion.
The question for investors is how quickly Bezos will spend his company’s money. Operating expenses in the quarter gained 37 percent to $58.3 billion — about the same pace as revenue growth.
By Spencer Soper; editors: Jillian Ward, Andrew Pollack