Amazon profit jumps while shares slip

Amazon's Day 1 headquarters building in Seattle                  James Martin  CNET

An investigation by the Mirror found that Amazon UK Services had paid £61.7 million corporation tax in the UK in the last 20 years.

AWS revenue represented 10% of total quarterly sales at Amazon, but 58% of the company's overall operating income.

Shares of the company fell 5 percent to $1,635 after the bell.

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.

Shoppers will spend US$484 billion globally on Amazon this year, up 26 per cent from 2018, and the Seattle-based company will capture more than half of all online spending in the USA, according to EMarketer Inc.

Net sales in North America, its biggest market, jumped 18.3 per cent to US$44.12 billion in the reported quarter. On Thursday, Amazon reported that Amazon Web Services generated $7.4 billion in revenue, up 45 percent year over year.




Amazon has paid less corporation tax in the United Kingdom over the last two decades than major retailers such as Marks and Spencer paid in one year alone, it has been reported. A lucrative cloud computing business, as well as fees that merchants pay Amazon to ship and advertise their products, has fattened the company's once-thin profit margin.

More customers signed up for Prime worldwide in 2018 than ever before. Additionally, more than 1 billion items ordered by Prime members were shipped for free. Amazon's revenue of nearly $72.4 billion in the period also exceeded Street forecasts of $71.7 billion, according to Zacks Investment Research.

"Alexa was very busy during her holiday season".

Additionally, the company's net income increased to $3.0 billion United States dollars (roughly $3.94 billion CAD) in Q4 2018, compared to $1.9 billion USD (roughly $2.49 billion CAD) in Q4 2017. After reaching the $1 trillion-mark last September, Amazon saw its shares drop some 25% during the final three months of 2018.

The rising shipping costs demonstrate the larger shift toward online shopping. But its grand plans were thrown into chaos after the country implemented new e-commerce regulations, which some analysts believe could cut its growth in the market by as much as half this year. Amazon in October pledged to pay all of its warehouse employees at least $15 an hour, while eliminating some bonuses and stock awards.

Desite demand for Alexa, Amazon said it expects revenue of between $56 billion and $60 billion in its first fiscal quarter of 2019, citing an unfavorable impact from foreign exchange rates. Sales in physical stores, which are predominantly Whole Foods locations, decreased 2.7 percent to $4.4 billion. 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.

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