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Amazon reports strong earnings for Q4, but stocks dip due to outlook for the first quarter

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Amazon reports strong earnings for Q4, but stocks dip due to outlook for the first quarter
News

News

Amazon reports strong earnings for Q4, but stocks dip due to outlook for the first quarter

2025-02-07 10:12 Last Updated At:10:20

Amazon on Thursday reported better-than-expected revenue and profits for the holiday shopping period, but its stocks dipped in after-hours trading due to disappointing guidance for the current quarter.

The Seattle-based e-commerce and technology company said its revenue for the October-December period totaled $187.8 billion, a 10% jump compared with the same period in 2023. Profits came out to $20 billion while earnings per share reached $1.86, higher than the $1.49 that analysts surveyed by FactSet had anticipated.

But the company said it expected revenue for the current quarter to be between $151 billion and 155.5 billion, lower than the $158.56 billion that analysts were expecting. The guidance anticipates “an unusually large, unfavorable impact” from foreign exchange rates, it said.

Amazon is the biggest online shopping destination in the U.S. and has long been a beneficiary of consumer spending during the holidays. As it has done in recent years, the company in October began offering promotions intended to lure early holiday shoppers. It advertised other discounts during the three-month period, including on major sales days such as Black Friday and Cyber Monday.

Amazon on Thursday reported it saw $75.5 billion in revenue for its online shopping business, up 7% from the same period in 2023.

Across the retail industry, holiday sales in November and December were better than expected compared with the previous year as lower inflation on holiday goods enticed shoppers to buy, according to The National Retail Federation. Online shopping also saw record sales levels, Adobe Analytics reported in January.

Sales for Amazon Web services, the company’s prominent cloud computing unit, rose 19% during the fourth quarter. But it fell slightly below analysts expectations.

Amazon is one of the biggest players in the competitive tech race around generative artificial intelligence. Like other tech companies, it has ramped up investments in the technology and is spending billions to expand data centers that support AI and cloud computing. The company is also spending money on other equipment, including its own computer chips and those developed by Nvidia. It has also rolled out its own AI models and integrated the generative AI into other parts of its business.

In the fourth quarter, Amazon reported spending $27.8 billion on property and equipment, significantly higher than the same period in 2023. During a call with analysts on Thursday, Amazon CEO Andy Jassy said capital expenditures for the quarter came out to $26.3 billion, most of which was geared towards AI and AWS.

“We think virtually every application that we know of today is going to be re-invented with AI inside of it,” Jassy said. “I think both our business, our customers and shareholders will be happy medium-to-long term that we're pursuing the capital opportunity and the business opportunity in AI.”

Jassy added during the call that Amazon, like many others, was “impressed” by DeepSeek, the Chinese artificial intelligence company whose chatbot recently became the most downloaded app in the U.S.

Amazon's quarterly report comes as the retail industry is absorbing a new 10% tariff President Donald Trump imposed on Chinese imports on Tuesday. Tariffs on Canada and Mexico have been put on hold for about a month.

Trump also threw out a trade exemption that allowed low-value shipments from China to bypass duties, a loophole that had given an advantage to China-founded e-commerce firms, such as Shein and Temu.

The new tariffs could benefit Amazon by increasing costs for its competitors. But it would also impact Chinese sellers who connect with American consumers on the company’s shopping platform. Furthermore, it could raise prices on a recently-launched online storefront that Amazon set up to ship low-cost products directly from China. The storefront, called Amazon Haul, was Amazon’s answer to Shein and Temu.

Additionally, analysts from Morgan Stanley wrote in a Monday note that Amazon's first-party retail business, though which the company sells products purchased from manufacturers, has the highest exposure to the tariffs. The analysts estimate 25% of the merchandise sold through that business comes from China.

FILE - An Amazon truck drives in in Philadelphia, Friday, April 30, 2021. (AP Photo/Matt Rourke, file)

FILE - An Amazon truck drives in in Philadelphia, Friday, April 30, 2021. (AP Photo/Matt Rourke, file)

Next Article

Cassie is due back for a second day of testimony in Sean 'Diddy' Combs' trial

2025-05-14 19:04 Last Updated At:19:10

NEW YORK (AP) — The R&B singer Cassie returns to the witness stand Wednesday after a day spent recounting grotesque and humiliating details of life with her ex-boyfriend, Sean “Diddy” Combs.

During her first day of testimony Tuesday at Combs' sex trafficking trial, Cassie described being pressured into degrading sexual encounters with paid sex workers. She also recounted being beaten numerous times by Combs when she did things that displeased him — like smiling at him the wrong way.

“You make the wrong face and the next thing I knew I was getting hit in the face,” she said.

Cassie, whose legal name is Casandra Ventura, accused Combs of gaining her submission by threatening to publicly release videos of her with male sex workers.

Combs’ attorneys have acknowledged Combs could be violent but maintain that the sexual acts were consensual. They say nothing he did amounted to sex trafficking or racketeering — the charges that he faces.

Lawyers for Combs have yet to cross-examine Cassie, a type of questioning that will give them an opportunity to challenge her credibility or poke holes in her accounts of what happened.

The trial is expected to last about two months.

Prosecutors have accused Combs of exploiting his status as a powerful music executive to violently force women into drugged-up sex parties he called “freak offs."

Cassie met Combs in 2005, when she was 19 and just at the start of a career as a singer, model and actor. She had a hit song, “Me & U,” in 2006 off an album released by Combs' Bad Boy Records.

Combs, who was 37 when they met, nurtured her career early on and also became her boyfriend for a decade.

Cassie left Combs' record label in 2019 and then sued him in 2023, accusing him of years of physical and sexual abuse. She told jurors during her testimony Tuesday that there were loving moments during their relationship but that Combs was always controlling and often violent.

Cassie said she was 22 when Combs first asked her to do a “freak off,” with the first one occurring in his Los Angeles home with a male stripper that left her feeling dirty and confused, but relieved that Combs was happy.

“It was his fantasy,” she said. “He was controlling the whole situation. He was directing it.”

Combs, 55, has been jailed since September. He faces at least 15 years in prison if convicted.

Sean Diddy'Combs, far left, and attorney Marc Agnifilo, second from left, listen as witness Cassie Ventura, far right, answers questions from assistant US Attorney Emily Johnson, center, with Judge Arun Subramanian presiding in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Sean Diddy'Combs, far left, and attorney Marc Agnifilo, second from left, listen as witness Cassie Ventura, far right, answers questions from assistant US Attorney Emily Johnson, center, with Judge Arun Subramanian presiding in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Sean Diddy'Combs, far left, and attorney Marc Agnifilo, right, sit at the defense table during witness testimony in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Sean Diddy'Combs, far left, and attorney Marc Agnifilo, right, sit at the defense table during witness testimony in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Cassie Ventura takes an oath before testifying in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Cassie Ventura takes an oath before testifying in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Cassie Ventura wipes tears from her eye while testifying in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

Cassie Ventura wipes tears from her eye while testifying in Manhattan federal court, Tuesday, May 13, 2025, in New York. (Elizabeth Williams via AP)

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