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Amazon Q4 income doubles YOY

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SEATTLE – Amazon’s net income just about doubled for the fourth quarter ended Dec. 31, 2021, to $14.3 billion compared with income of $7.2 billion in the fourth quarter of 2020.

Net sales increased 9% to $137.4 billion in the fourth quarter, compared with $125.6 billion in the fourth quarter of 2020. Earnings per share came in at $27.75 per diluted share this quarter compared with $14.09 per diluted share in the fourth quarter of last year.

“Given the extraordinary growth we saw in 2020 when customers predominantly stayed home, and the fact that we’ve continued to grow on top of that in 2021, our retail teammates have effectively operated in peak mode for almost two years,” said Andy Jassy, Amazon CEO. “As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic.”

For the full year, Amazon’s net sales increased 22% to $469.8 billion compared with $386.1 billion in 2020. And net income increased $33.4 billion for the full year or $64.81 per diluted share compared with income of $21.3 billion or $41.83 per diluted share in 2020.

The company reported that more than 130,000 third-party sellers worldwide made more than $100,000 in sales on Amazon during the fourth quarter, and between Black Friday and Christmas, U.S.-based third-party sellers sold an average of 11,500 products per minute.

“On a two-year basis we are seeing growth in third party sellers’ revenue,” said Amazon CFO Brian Olsavsky on the quarterly earnings call with investors. “Sellers were the big winners in Q4, with 56% of total sales, which was a record for third party sellers. We invest a lot to help sellers be successful on our site.”

Amazon will increase the price of a Prime membership in the U.S., with the monthly fee going from $12.99 to $14.99, and the annual membership from $119 to $139. This is the first time Amazon has raised the price of Prime since 2018. For new Prime members, the price change will go into effect on Feb. 18, and for current Prime members, the new price will apply after March 25 on the date of their next renewal.

Also, on the earnings call with investors, Olsavsky said he sees things improving with regards to the supply chain and labor shortages.  “As we turn the page into 2022, Omicron has kicked up, and this causes a different type of labor issue with lots of people on sick leave,” he said. “So we end up paying two or three times for the same labor hours since we are paying sick time plus others covering shifts on overtime.

“The good news is that the labor challenge isn’t as great now, so we can work to make operations more efficient as we get staffing levels up.”

For the first quarter 2022, Amazon predicts net sales to be between $112 billion and $117 billion, or to grow between 3% and 8% compared with first quarter 2021.



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