Despite posting the best quarterly profit in its history, Amazon plummeted as much as 13% after-hours after missing on net sales and earnings per share. This came after the stock had soared to end up nearly 9% in the hours preceding the earnings release.
The Seattle-based retail company reported net sales of $35.7 billion for the fourth quarter of 2015, up 22% from $29.3 billion in the previous year, with diluted earnings of $1.00 per share. The street was expecting a gain of $1.56 per share on sales of $35.98 billion.
AWS grew 69% YoY to $2.4 billion, beating street expectations of $2.38 billion. Amazon reported a segment operating income of $687 million for AWS up from $240 million in Q4 of last year. Amazon Web Services is more-often-than-not the company’s major profit generator and accounted for a great deal of the stock growth in 2015.
Like Apple, Amazon was quick to address the negative effects of the unfavorable foreign exchange rate fluctuations, noting in the report that there was a “$1.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter.”
North America continues to be the company’s bread-and-butter with net sales of $21.5 billion, up from $17.33 in Q4 of 2014, though international sales are definitely growing as well – up to $11.8 billion from $10.5 billion in Q4 of last year.
Amazon’s Q4 is always an important one for the e-commerce company due to the holiday season’s major retail impacts. The company’s retail division still accounts for more than 90% of its business.
Most analysts expected Amazon to show strong growth in holiday sales. The company reported after the Thanksgiving weekend that sales of their own devices were three times higher than the previous year, referencing strong growth for the company’s Echo device, Fire tablets and Fire TV devices.
Amazon also detailed that paid Prime memberships increased 51%. The service allows consumers perks from the company like free shipping, an expanded catalog and streaming video.