Summary:

• Amazon announced financial results for its fourth quarter ended December 31, 2022, with net sales increasing 9% to $149.2 billion.
• Operating income decreased to $2.7 billion in the fourth quarter, compared with $3.5 billion in fourth quarter 2021.
• Net income decreased to $0.3 billion in the fourth quarter, or $0.03 per diluted share, compared with $14.3 billion, or $1.39 per diluted share, in fourth quarter 2021.
• Amazon had a record-breaking holiday season with customers purchasing nearly half a billion items from small businesses in the U.S.
• Amazon introduced Sparrow into the company’s first fulfillment center and delivered the 10 millionth package using electric delivery vehicles from Rivian.
• Amazon launched Amazon Clinic, a message-based virtual health service, and AWS Graviton3E chips, AWS Nitro Cards, and Inf2 instances.
• Amazon announced Amazon Security Lake, AWS Supply Chain, AWS SimSpace Weaver, AWS Clean Rooms, and Inspire.

The Details:

Amazon, the e-commerce giant, has released its earnings report for the fourth quarter and full year of 2022. The company reported a net sales increase of 9% to $149.2 billion in the fourth quarter of 2022, compared to $137.4 billion in the fourth quarter of 2021. Excluding the $5.0 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased by 12% compared to the fourth quarter of 2021.

The North America segment saw an increase of 13% year-over-year to $93.4 billion, with a 14% increase excluding changes in foreign exchange rates. The International segment sales decreased by 8% year-over-year to $34.5 billion, but increased by 5% excluding changes in foreign exchange rates. Meanwhile, the AWS segment sales increased by 20% year-over-year to $21.4 billion.

Despite the strong sales growth, operating income decreased to $2.7 billion in the fourth quarter of 2022, compared to $3.5 billion in the fourth quarter of 2021. The operating income in the fourth quarter of 2022 included approximately $2.7 billion of charges for changes in estimates related to self-insurance liabilities, impairments of property and equipment and operating leases, and estimated severance costs, which primarily impacted the North America segment.

The North America segment reported an operating loss of $0.2 billion, compared to an operating loss of $0.2 billion in the fourth quarter of 2021. The International segment reported an operating loss of $2.2 billion, compared to an operating loss of $1.6 billion in the fourth quarter of 2021. Meanwhile, the AWS segment reported operating income of $5.2 billion, compared to operating income of $5.3 billion in the fourth quarter of 2021.

In terms of net income, Amazon reported a decrease to $0.3 billion in the fourth quarter of 2022, or $0.03 per diluted share, compared to $14.3 billion, or $1.39 per diluted share, in the fourth quarter of 2021. The fourth quarter of 2022 net income included a pre-tax valuation loss of $2.3 billion included in non-operating income (expense) from the common stock investment in Rivian Automotive, Inc., compared to a pre-tax valuation gain of $11.8 billion from the investment in the fourth quarter of 2021.

For the full year of 2022, Amazon reported net sales of $514.0 billion, an increase of 9% compared to $469.8 billion in 2021. Excluding the $15.5 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased by 13% compared to 2021. The North America segment sales increased by 13% year-over-year to $315.9 billion, while the International segment sales decreased by 8% year-over-year to $118.0 billion, or increased by 4% excluding changes in foreign exchange rates. The AWS segment sales increased by 29% year-over-year to $80.1 billion.