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Amazon reported its earnings on Thursday night last week. These are highly anticipated numbers because it's one of a few companies with over $1 trillion in market cap. Amazon beat profit expectations, but missed revenue forecasts. Sales grew by 41% in pandemic-stricken 2020, as a result of a societal shift to online shopping. In this reporting period they advanced by another 27%.
Amazon forecast revenue growth of 10% to 16% for the upcoming quarter, which is very impressive but lower than the 20%, 30% or 40% growth figures analysts have become accustomed to.
The Amazon Web Services (AWS) division is still powering ahead, growing revenue by 37%. AWS now makes up 13% of Amazon's sales but 54% of its profits.
Given Amazon's size, it's a soft target for politicians and social groups looking to score cheap points. Roughly speaking, these people complain that Amazon is not doing enough for society. What poppycock! During the pandemic last year, Amazon allowed people to shop from the safety of their homes, buying goods at very competitive rates.
Probably more impressive is that they managed to do this with a workforce that had a covid infection rate lower than society as a whole. While many industries have been cutting their workforce, Amazon grew their global headcount by 52% over the last year.
Amazon is the global leader in e-commerce and cloud services. These are two industries still in their early growth stages, with significant global potential ahead. This is a stock to own for the long term, just ignore the short-term noise.
