Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Jan 28 2016 16:30:40

Amazon Sales up 26 Percent in Fourth Quarter 2015

By: Ina Steiner

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Amazon's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing fourth quarter 2015 earnings, you can view the full release with tables on the Amazon investor relations website.

Announces Fourth Quarter 2015 Sales up 22% to $35.7 Billion
January 28, 2016 - SEATTLE - Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2015.

Operating cash flow increased 74% to $11.9 billion for the trailing twelve months, compared with $6.8 billion for the trailing twelve months ended December 31, 2014. Free cash flow increased to $7.3 billion for the trailing twelve months, compared with $1.9 billion for the trailing twelve months ended December 31, 2014. Free cash flow less lease principal repayments increased to $4.7 billion for the trailing twelve months, compared with $529 million for the trailing twelve months ended December 31, 2014. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $2.5 billion for the trailing twelve months, compared with an outflow of $2.2 billion for the trailing twelve months ended December 31, 2014.

Common shares outstanding plus shares underlying stock-based awards totaled 490 million on December 31, 2015, compared with 483 million one year ago.

Fourth Quarter 2015

Net sales increased 22% to $35.7 billion in the fourth quarter, compared with $29.3 billion in fourth quarter 2014. Excluding the $1.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 26% compared with fourth quarter 2014.

Operating income increased 88% to $1.1 billion in the fourth quarter, compared with operating income of $591 million in fourth quarter 2014.

Net income was $482 million in the fourth quarter, or $1.00 per diluted share, compared with net income of $214 million, or $0.45 per diluted share, in fourth quarter 2014.

Full Year 2015

Net sales increased 20% to $107.0 billion, compared with $89.0 billion in 2014. Excluding the $5.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 26% compared with 2014.

Operating income was $2.2 billion, compared with operating income of $178 million in 2014.

Net income was $596 million, or $1.25 per diluted share, compared with net loss of $241 million, or $0.52 per diluted share, in 2014.

“Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100 billion in annual sales and serve 300 million customers,” said Jeff Bezos, founder and CEO of Amazon.com. “And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like Day 1.”

Highlights

Fire TV remains the #1 best-selling streaming media player in the U.S., having added over 1,000 new apps, channels, and games since September, including NBC, NBC Sports, Watch HGTV, Watch Food Network, and Watch Travel Channel.

The $50 Fire tablet has been the #1 best-selling, most gifted, and most wished-for product across all items available on Amazon.com since its introduction 19 weeks ago.

The Alexa Skills Kit and Alexa Voice Service continue to attract innovative companies, with Ford, Invoxia, Vivint, Alarm.com, and Ooma announcing plans to integrate their products and services with Alexa. In addition, Alexa continues to get smarter with new features, including local search from Yelp, news sources from CNN and Bloomberg, enhanced IFTTT support, new alarm tones, and customized sports updates.

Last quarter, developers added over 100 new capabilities to Alexa-enabled devices. Amazon Echo and Fire TV customers can now play Jeopardy!, get stock quotes with Fidelity, hear headlines from The Huffington Post, exercise with a seven-minute workout, and test their Star Wars knowledge with a trivia quiz from Disney.

Amazon announced the first devices available with Amazon Dash Replenishment Service, including products from Brother, GE, and Gmate. Additionally, new brands and devices have joined the Dash Replenishment program, including Purell and Whirlpool.

In 2015, worldwide paid Prime memberships increased 51% — 47% in the U.S. and even faster outside the U.S.

Prime Video continues to grow internationally with nearly double the streaming customers compared with fourth quarter 2014.

The Prime-exclusive Original Series Mozart in the Jungle received two Golden Globes for Best Television Series - Musical or Comedy and Best Performance by an Actor in a Television Series - Musical or Comedy (Gael García Bernal).

Over the holidays Prime members made The Man in The High Castle the most watched series on Prime Video by 4.5x. The Amazon Original Series received outstanding critical acclaim, including USA Today calling it the “best new drama of the season.”

The second season of hit show Transparent was named as one of the top television series of 2015 by The New York Times, Variety, IndieWire, and The New Yorker.

Amazon Studios released its first Original Movie Chi-Raq, directed by Spike Lee, to rave reviews. The film has been included in 2015 “Best Films” lists from LA Weekly, The New Yorker, The Washington Post, Los Angeles Times, Slant, and Vulture.

Amazon launched the Streaming Partners Program, an over-the-top streaming subscription program that gives Prime members the option to add SHOWTIME, STARZ, and dozens more video subscriptions to their Prime membership.

In the fourth quarter, Prime Music streaming hours more than tripled in the U.S. compared with fourth quarter 2014.

Prime Music launched in Germany and Japan, offering Prime members more than one million songs and hundreds of playlists at no additional cost to their membership.

Since launching in December 2014 with one location, Prime Now has grown to more than 25 metropolitan areas across the U.S., U.K., Italy, and Japan.

Prime Same Day launched in the U.K. and Germany, offering Prime members unlimited free same-day delivery on a million items.

Amazon Pantry launched in the U.K., allowing Prime members to purchase daily essentials in everyday sizes and have items delivered for a low, flat-rate fee.

In 2015, Fulfillment by Amazon (FBA) shipped over one billion units on behalf of sellers. The number of active sellers using FBA grew more than 50%.

In the fourth quarter, FBA units represented nearly 50% of total third-party units.

Payment volume from Pay with Amazon grew more than 150% year-over-year in 2015, giving Amazon shoppers a secure way to pay on thousands of websites using information already stored in their Amazon accounts.

Amazon China launched the Amazon Global Store (AGS) 2.0 customer experience, which provides customers an easier and more convenient shopping experience through single login, unified shopping cart, and local payment. Additionally, AGS selection has grown to over nine million items.

Amazon.in was the top e-commerce site in India throughout the fourth quarter, including the busy Diwali shopping season, according to global analytics firm comScore.

Downloads of the Amazon.in mobile shopping app grew faster in the fourth quarter than any other e-commerce app in India, according to app analytics firm App Annie.

Sellers on Amazon.in sold more in the fourth quarter than in all four quarters combined in 2014.
Amazon Fashion, East Dane, and MyHabit return as the lead sponsor for the second season of New York Fashion Week: Men’s, hosted by The Council of Fashion Designers of America.

Amazon Launchpad, a program that helps startups launch, market, and distribute their products, has worked with leading venture capital firms, startup accelerators, and crowd-funding platforms to help more than 500 startups launch over 750 products in the U.S., U.K., and China.

Amazon entered into an agreement to support the construction and operation of Amazon Wind Farm U.S. Central, which is expected to generate approximately 320,000 megawatt hours (MWh) of wind energy on an annual basis. Amazon Wind Farm U.S. Central, combined with Amazon’s previously announced projects, Amazon Wind Farm Fowler Ridge, Amazon Solar Farm U.S. East in Virginia, and Amazon Wind Farm U.S. East in North Carolina, will be responsible for delivering more than 1.6 million MWh of additional renewable energy annually, roughly equivalent to the amount of energy required to power 150,000 U.S. homes for a year.

Only eight months after launch, Amazon Business, a marketplace with features and benefits tailored to businesses, serves more than 200,000 businesses ranging from small businesses to Fortune 500 companies.

Amazon Web Services (AWS) announced the launch of its Asia Pacific (Seoul) Region in Korea and its plans to open a new region in Canada. The AWS Cloud is now available from 32 Availability Zones across 12 geographic regions worldwide, with another five AWS Regions (and 11 Availability Zones) in Canada, China, India, Ohio, and the U.K. expected to be available in the coming year.

AWS announced the general availability of Amazon WorkMail, a secure, managed business email and calendaring service with support for existing desktop and mobile email clients.

AWS announced the general availability of AWS IoT, a managed cloud platform that lets billions of connected devices — such as mobile phones, cars, factory floors, aircraft engines, sensor grids, and more — easily and securely interact with cloud applications and other devices. AWS IoT can support trillions of messages, and can process, route, and keep track of those messages to AWS endpoints and other devices reliably and securely, even when the devices aren’t connected.

AWS announced AWS Certificate Manager (ACM), a new service that enables customers to easily provision, manage, and deploy Secure Sockets Layer/Transport Layer Security (SSL/TLS) certificates for use with AWS services. SSL/TLS certificates are used to secure network communications and establish the identity of websites over the Internet. Certificates, which typically cost between $45 and $499, are provided to AWS customers free of charge through ACM and are verified by Amazon’s certificate authority, Amazon Trust Services.

AWS launched EC2 Scheduled Reserved Instances, allowing customers to reserve capacity for their applications that run on a part-time, recurring basis with a daily, weekly, or monthly schedule over the course of a one-year term.

AWS announced 722 significant new services and features in 2015, a 40% increase over 2014.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of January 28, 2016, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.

First Quarter 2016 Guidance

Net sales are expected to be between $26.5 billion and $29.0 billion, or to grow between 17% and 28% compared with first quarter 2015.

Operating income is expected to be between $100 million and $700 million, compared with $255 million in first quarter 2015.

This guidance includes approximately $600 million for stock-based compensation and other operating expense (income), net. It assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

See our take on Amazon earnings in, "Amazon Warehouses Burst at the Seams in Q4 2015" (link to article) from the January 29th issue of Newsflash.




Comments (17) | Leave Comment | Permalink

Readers Comments

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

by: FeelingFroggy This user has validated their user name.

Thu Jan 28 18:06:19 2016

We spent thousands of dollars in December on Amazon. Not one dime on fleabay.

Glad we could help increase their sales and will continue shopping their.

We have no use for a site whose search in screwed up and who caters to the chinese junk and scammer sellers. We are done with fleabay stick a knife in them, they are done.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: Philip Cohen

Thu Jan 28 21:03:13 2016

"Shares of Amazon plummeted in extended trading, after the company posted a big earnings miss for the holiday quarter. The Internet retail giant reported Thursday fourth-quarter net income of $1 per share on $35.75 billion in sales, missing the $1.56 per share on $35.93 billion in revenue expected by a consensus estimate from Thomson Reuters."

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: iheartjacksparrow

Thu Jan 28 22:43:36 2016

@Philip Cohen - Glad to see you've come back. I always enjoy your comments.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

by: Chicago48 This user has validated their user name.

Fri Jan 29 06:56:02 2016

This just proves, AMZ is taking over the (retail) world.  If you can't join them (thru FBA) you should sit by the sidelines and watch.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

by: Chicago48 This user has validated their user name.

Fri Jan 29 06:58:01 2016

We spent thousands of dollars in December on Amazon. Not one dime on fleabay.
^^
I have a confession to make.  As much as I rant & rage about Chinese merchants, I've been buying more and more items from China.  The prices and quality can't be beat.  

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: Basset

Fri Jan 29 08:54:31 2016


We spent quite a bit on purchases  at Amazon in November and December.  They had partnered with our bank's card and provided a nice rebate perk.  

Given the type of things we were purchasing, I think Walmart was hurt more than anyone else.

If Amazon can maintain prices on everyday items that don't widely fluctuate - I'll be there more often this year.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: RKTOYS

Fri Jan 29 11:23:21 2016

I get the criticism of eBay but I don't see why everybody loves Amazon.  They screw small sellers even harder and anything I buy is liable to rattle around an unpadded box.  Lots of better places to deal with most of the time.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

by: Moonwishes This user has validated their user name.
Web Site

Fri Jan 29 11:29:16 2016

>>This just proves, AMZ is taking over the (retail) world.  If you can't join them (thru FBA) you should sit by the sidelines and watch<<

Hardly. Did I miss a reference to FBA here? Without FBA which I don't and won't use, my sales on Amazon outpaced other venues by around 75% with eCRATER bringing in 25% and ebay 0% as it has been for the last 8+ years.

Each year I buy more on Amazon as it is easier to shop there for me. I purchased a discounted Prime membership this year. Of all the items I bought, only one was through FBA and it was something to put into my inventory and also to get rid of a $2 product that was going to be the ONLY competition to my $18 product! Why with no competition would someone using FBA price something at the bottom of the barrel especially since it was still in print and with a MSRP of $30?

One of the other posts in the ecommercebytes posts was about FBA and why their items might not be selling and they kept saying it could be the price and maybe they should bring it down. For the most part what I see with FBA is bottom of the barrel prices, there is no more down for them if they want to make at least a quarter. I don't see how FBA merchants/penny sellers make anything when you consider the fees.

Glad amazon is doing well and I'm glad Jeff thought up the idea! I hope he realizes how important his company is with keeping food on many of his 3P sellers tables.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: Shop and Ship

Fri Jan 29 12:59:18 2016

I believe Jeff Bezos when he says that to him every day is like the first day; hopefully he's not been driving the delivery van lately.  

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: FEEbay

Fri Jan 29 20:09:47 2016

@Chicao48 wrote: "This just proves, AMZ is taking over the (retail) world.  If you can't join them (thru FBA) you should sit by the sidelines and watch."

FINE...I am drinking a frosty one and watching from the sidelines......Amazon sucks just as bad as Ebay, which is why we have been out of there for a Year and a Half. They abuse small sellers with equally insane policies, and seem to be constantly trying to bully 3p seller into using FBA.
Getting your own site is the only way to go....

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: laurengrace

Sat Jan 30 22:18:00 2016

Amazon is very abusive to its sellers. They are no different on Amazon except that they will hold your money WAAAAY longer than eBay when they decide to do their "seller reviews" after a sales spike in December which is what we all expect and look forward to all year. Then January rolls around and bots gone wild and "review and/or suspend" mass quantities of sellers. I am still here but have never been one too put all my eggs in one basket, and have other avenues working just fine, but it will not be long before i say goodbye forever to the bid bad Bamazon.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: Philip Cohen
Web Site

Sun Jan 31 00:19:35 2016

@laurengrace ,

eBay does not hold sellers' funds; PayPal does that, and up to 180 days is my understanding. Amazon holds funds "WAAAAY" longer than that long?

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

by: maxmad This user has validated their user name.

Sun Jan 31 09:08:17 2016

Corporate greed, A couple of billion short, of expectations, call the wambulance,

Something is seriously wrong if shareholders can only afford gold plating on their hub caps, instead of solid gold ones, what's going on here?, time for amazon to really put the screws to their sellers, time to squeeze more out, this year.

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: laurengrace

Mon Feb 1 14:35:01 2016

Philip, Amazon-If they suspend a seller will hold funds for 90 days. If they put a seller under review, which is happening a lot right now, they will put you on a 2 week rolling reserve for the amount you made in the previous 2 weeks. One seller said they are holding $12,000.  

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: Philip Cohen

Mon Feb 1 19:32:17 2016

@laurengrace,

Still, that does not sound as bad as some of the stories about "PreyPal" holds ...

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: IDKwhoIare

Tue Feb 2 13:32:55 2016

FeelingFroggy says, ''We have no use for a site whose search in screwed up and who caters to the chinese junk and scammer sellers.''

Precisely why I will be reducing my purchasing on Amazon.

I don't sell on Amazon and never would, but I have been buying there since they opened.  I cannot stand to be overwhelmed by Chinese sellers and their garbage on a search.  It is at least as bad, if not worse, than eBay.  Worse because you cannot get rid of at least half of them with a broke filter to U.S. Only on searches at Amazon.  No filter available on Amazon to only U.S. and sometimes it is clear as mud that you have just bought out of the U.S. until you get a shipping notice that says it will take 6-8 weeks to get your item instead of the 3 weeks shown on the listing.

Amazon (or other large online markets) need to understand that quite a few Buyers are unwilling to be the fodder underfoot on it's way to building a worldwide online Kingdom or to be a guinea pig while everyone works out the logistics and smooths out the snags...such as Customs, horribly high return postage costs, language barriers, physical size differences and simple thievery with zero recourse.  

Perminate Link for Amazon Sales up 26 Percent in Fourth Quarter 2015   Amazon Sales up 26 Percent in Fourth Quarter 2015

This user has validated their user name. by: IDKwhoIare

Tue Feb 2 13:35:21 2016

@Phillip Cohen...what IheartJack said



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