SEATTLE – Net income for e-commerce giant Amazon decreased to $300 million in the fourth quarter of 2022, compared with earnings of $14.3 billion in fourth quarter 2021.
Meanwhile, net sales increased 9% to $149.2 billion in the fourth quarter compared with $137.4 billion in fourth quarter 2021.
Earnings per share came in at 3 cents per diluted share this quarter compared with $1.39 per diluted share in the fourth quarter of last year.
“We’re encouraged by the continued progress we’re making in reducing our cost to serve in the operations part of our stores business,” said CEO Andy Jassy in the earnings statement. “In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon.”
Jassy added that, although the vast majority of total market segment share still reside in physical stores, as this equation steadily flips, he believes Amazon’s leading customer experiences in these areas will lead to significant growth in the coming years.
For the full year, the company posted a net loss of $2.7 billion compared with a net income of $33.4 billion for 2021. Net sales increased 9% in 2022 to $514 billion compared with $469.8 billion in 2021.
Diluted earnings per share were a negative 27 cents for 2022 compared with $3.24 for the full year 2021. Amazon stock is trading down 5% this morning after the release of the company’s earnings report.
“The operating income was negatively impacted by three large items, which added approximately $2.7 billion of costs in the quarter. This was related to employee severance, impairments of property and equipment and operating leases and changes in estimates related to self-insurance liabilities,” CFO Brian Olsavsky said on the earnings call with investors. “This cost primarily impacted our North America segment. If we had not incurred these charges in Q4, our operating income would have been approximately $5.4 billion.”
CEO Andy Jassy joined Olsavsky on the earnings call with investors to take questions at the end of his first full year as CEO. Jassy said he will join the earnings calls from time to time over the year as is warranted.
“Over the past few years, we took a fulfillment center footprint that took more than 25 years to build and doubled it in just a few years, and built out a network the size of UPS in just a couple years,” Jassy said on the call. “It took all we had to get those functional. Now we are working on how to optimize them and make them more efficient and productive.
“We realize that all of those new touchpoints have to link together to get product to customers. The size makes it a different network. Getting flows working right takes time. I am pleased with Q4 progress, and our work will expand into 2023.”
For the first quarter 2023, Amazon estimates net sales between $121 billion and $126 billion growth of between 4% and 8% compared with first quarter 2022.