Amazon's fourth-quarter net profit of $14.3 billion increased 98.6% year-over-year

February 5 news, after the stock market closed on Thursday local time, retail giant Amazon released its financial report for the fourth quarter of 2021 as of December 31. Amazon's fourth-quarter net sales were $137.4 billion, up 9% year-over-year; net profit was $14.3 billion, up 98.6% year-over-year; and earnings per share were $27.75, up 96.9% year-over-year, according to the earnings report. Thanks to Amazon's impressive fourth-quarter results, its after-hours stock price rose sharply by more than 18%.

In the fourth quarter of 2021, Amazon's net sales increased by 9% to $137.4 billion, compared to $125.6 billion in the fourth quarter of 2020. Excluding the $1.3 billion negative impact from year-over-year changes in currency for the entire quarter, net sales increased 10% from the fourth quarter of 2020. Operating profit fell to $3.5 billion in the fourth quarter of 2020, compared to $6.9 billion in the fourth quarter of 2020. The company's fourth-quarter net income increased to $14.3 billion at $27.75 per share, compared to net income of $7.2 billion at $14.09 per share for the fourth quarter of 2020. Fourth-quarter 2021 net income included $11.8 billion in pretax valuation gains, including non-operating income from investments in The Common Stock of Rivian Automotive, which completed its initial public offering (IPO) in November.

By geography, Amazon's North American division (U.S., Canada) had fourth-quarter net sales of $82.36 billion, compared to $75.35 billion in the year-ago quarter, while operating losses were $206 million and operating profit was $2.95 billion in the year-ago quarter. Amazon's international divisions (UK, Germany, France, Japan and China) had fourth-quarter net sales of $37.27 billion, compared to $37.47 billion in the year-ago quarter, compared to an operating loss of $1.63 billion compared to an operating profit of $363 million in the year-ago quarter. Amazon's AWS cloud services reported fourth-quarter net sales of $17.78 billion, compared to $12.74 billion in the year-ago quarter; operating profit was $5.29 billion, up from $3.56 billion in the year-ago quarter. Amazon's sales from the North American segment accounted for 60 percent of total sales in the fourth quarter, essentially the same as the year-ago quarter; sales from the international division accounted for 27 percent of total sales, down from 30 percent in the year-ago quarter; and sales from AWS cloud services accounted for 13 percent of total sales, up from 10 percent in the year-ago quarter.

For the full year 2021, Amazon's net sales increased 22% year-over-year to $469.8 billion, compared to $386.1 billion in 2020. Excluding the favorable impact of $3.8 billion from full-year currency movements, net sales increased 21% from 2020. Operating profit increased to $24.9 billion, compared to $22.9 billion in 2020. Net income increased $33.4 billion to $64.81 per share, compared to a net profit of $21.3 billion at $41.83 per share in 2020.

In the past 12 months ended December 31, 2020, Amazon's operating cash flow fell by 30% to $46.3 billion, compared to $66.1 billion for the past 12 months ended December 31, 2020. Free cash flow declined to an outflow of $9.1 billion, compared to an inflow of $31 billion in the 12 months prior to December 31, 2020. As of December 31, 2021, issued common stock plus share-based incentives totaled 523 million shares, compared to 518 million shares one year ago.

Amazon currently employs more than 1.6 million people worldwide and continues to invest in industry-leading compensation and benefits. This includes the average starting salary of front-line workers in the U.S. of more than $18 an hour, as well as comprehensive benefits for full-time employees. Those benefits include health, vision and dental insurance, up to 20 weeks of paid parental leave, and Amazon's Career Choice Program, through which the company fully subsidizes employees' college tuition, including courses, book fees and other expenses. Amazon has also expanded its incentives for frontline workers to be vaccinated against COVID-19. Each first-line employee receives a bonus of up to $120 ($40 per dose), and a $100 new employee bonus for a fully vaccinated new employee.

Andy Jassy, Amazon's chief executive, said: "Many thanks to Amazon's employees for overcoming another quarterly challenge associated with COVID-19 and delivering to customers this holiday shopping season. Given the extraordinary growth we saw in 2020( when customers mostly stayed home, and the fact that we continue to grow from 2021, our retail team has been effectively operating in peak mode for almost two years. We have put a lot of effort into it, and I am very grateful and proud of the efforts our team has put in serving our customers. As expected during the holiday season, we see labor supply shortages and inflationary pressures driving costs up, and these problems will continue into the first quarter due to the Omikejong virus. Despite these short-term challenges, we continue to feel optimistic and excited about our business as we emerge from the pandemic. When you combine our staffing and the expansion of our business network to deliver faster speeds to more customers, AWS is growing at a rate of 40% per year ($71 billion in revenue today), plus the release of compelling new entertainment shows like The Lord of the Rings, and we've developed a host of new features in areas like Alexa, Ring, Grocery, Pharmacy, Amazon Care, Kuiper, and Zoox. We have a lot to look forward to in the coming months and years. ”

Amazon also continues to invest heavily in Prime. Over the past few years, Amazon has added more product options, offering fast, free, unlimited Prime shipping, more exclusive offers and discounts, and more high-quality digital entertainment services, including TV, movies, music, and books. As Prime membership benefits continue to expand, as well as rising wages and transportation costs, Amazon will raise the price of Prime memberships in the United States, from $12.99 to $14.99 per month and from $119 to $139 per year. This is the first time Amazon has raised the price of the Prime service since 2018. For new Prime members, the price adjustment will take effect on February 18, 2022, while for existing Prime members, the new price will take effect after March 25, 2022, the date of their next renewal.

During this year's holiday shopping season, third-party sellers, most of whom are small and medium-sized businesses, achieved record global sales on amazon stores. More than 130,000 third-party sellers worldwide have more than $100,000 in sales on Amazon. During Black Friday and Christmas, third-party sellers in the U.S. sold an average of 11,500 items per minute. In addition, Amazon India's month-long Great India Festival promotion is the largest shopping celebration ever for sellers and brand partners on Amazon, with nearly 30,000 sellers selling more than $100,000. The number of Prime members enjoying program benefits has reached an all-time high. In 2021, U.S. members received more than 6 billion free couriers, and more than 200 million Prime members worldwide watched shows and movies.

In the first quarter of 2022, Amazon expects its net sales to be between $112 billion and $117 billion, or up 3% to 8% compared to the first quarter of 2021, but below the $120.94 billion widely expected. The company also expects the exchange rate to have an adverse impact of approximately 150 basis points. Operating profit is expected to be between $3 billion and $6 billion, compared to $8.9 billion in the first quarter of 2021. The expectation includes about $1 billion in depreciation charges as the estimated useful life of Amazon's servers and networking equipment increases starting Jan. 1, 2022.

On Thursday, local time in the United States, Amazon's stock price fell $235.34 in regular trading on nasda, closing at $2776.91, a drop of 7.81%. But in subsequent after-hours trading, Amazon shares soared $517.26 to $3,293 per share, up more than 18.63 percent. Over the past 52 weeks, Amazon's lowest share price is $2707.04 and the highest price is $3773.08. Based on Thursday's closing price, Amazon's market capitalization is $1.408 trillion. (Golden Deer)