Amazon Reports First $100 Billion Quarter Following Massive Growth

Amazon Reports First $100 Billion Quarter Following Massive Growth

2020 was a massive year for Amazon, ending with a $125 billion quarter and a new CEO, ending off with doubling analyst EPS estimates.

2020 was a massive year for Amazon, ending with a $125 billion quarter and a new CEO, ending off with doubling analyst EPS estimates.

Credit | Local10

Amazon announced in its Tuesday earnings report for Q4 2020 that current Amazon Web Services CEO Andy Jassy will replace current CEO, Jeff Bezos as Amazon CEO during Q3 2021. Jeff Bezos will become executive chairman, although he will lose his CEO position.

Alongside that major announcement, the company provided its biggest quarter ever, at $125.56 billion, pushing it past the major $100 billion point, ironically in the same quarter that Apple announced its first $100 billion quarter as well. Shares were up less than 1% after hours, likely on trying to decide between an amazing quarter and CEO Bezos’ leaving from the company.

Here’s the main points of interest:

  • Revenue (sales): $125.55 billion (44% growth)
 
  • Net income$7.22 billion (120% growth)
 
  • Earnings per share: $14.38/share (118% growth)
 
  • AWS sales$12.7 billion vs $9.95 billion (28% growth)

Bezos based his decision to step down on his growing other “new products and early initiatives,” focusing heavily on the Day One Fund, Bezos Earth Fund, Washington Post, and SpaceX competitor Blue Origin.

I think Bezos explained it better himself,

“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive; When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

It sounds as though Bezos believes his successor, Jassy, will be more growth and initiative heavy than the current CEO, pushing into new technologies to help excite customers and investors, inciting some growth across the company’s pages.

That same investors’ call has said that there’s already a “highly effective” succession plan in place, designed to better assist Jassy’s ascension to the realm of Amazon’s CEO. He previously was the Amazon Web Services CEO, as mentioned, which has quickly grown to become one of Amazon’s top divisions. That should mean that he has the knowhow and strategies to grow this company, which could be really good.

CFO Brian Olsavsky said that:

I (Olsavsky) will reiterate that Jeff is not leaving. He is getting a new job; He will be involved in many large on-way-door issues, as we say, one-way doors meaning the more important decisions things like acquisitions, things like strategies, and going into grocery and other things.”

Executive Chairman is still a high position within the company, still regularly involved within the major decisions of the company. While not as heavily involved as CEO, Bezos will still have significant power within the company, still able to use his magic to grow the company with relevant acquisitions.

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Q1 2021

Amazon has said that sales will slow down heavily within the first quarter, down to $100-$106 billion, a major slowdown from 4th quarter’s $125 billion. That would be due to increase COVID related costs, and a decrease in the Christmas selling boost. $100 and $106 billion would still result in YoY increases of 33% and 40%, respectively, ahead of estimates of $95 billion.

Blockbuster 4th quarter results were pushed by a “record breaking holiday”, with over 1 billion products having been delivered worldwide. That massive number of products constituted a 175 thousand employee hiring spree, with over 1.3 million employees worldwide.

Outside of core retail, Amazon’s fast growing cloud-computing division, Amazon Web Source, climbed 28% to $12.7 billion, which was lower than Wall Street’s expectations of $12.83 billion. That 28% climb is yet again lowering, as the unit slowly matures into its #1 position within the market.