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Amazon shares fell on Thursday as the ecommerce group posted a weaker than expected outlook for the first quarter, warning it anticipated an “unusually large, unfavourable impact” from a strong dollar.
The Seattle-based group’s fourth-quarter revenues — which includes the holiday shopping season — rose 10 per cent year on year to $187.8bn, Amazon said in on Thursday. Revenue came in above analysts’ expectations in a Visible Alpha survey of $187bn.
But it said it expected net sales in the current quarter to come in between $151bn-$155.5bn, well below forecasts for $158.5bn. A strong dollar will knock first-quarter revenues by $2.1bn, Amazon said.
The US dollar has risen about 3 per cent against a basket of six peers over the past 12 months, according to FactSet data.
Amazon Web Services, a crucial engine for profit and the centrepiece of its commercial artificial intelligence endeavours, posted a 19 per cent increase in sales to $28.8bn. This fell slightly short of expectations.
It is one of several Big Tech companies, including Alphabet and Microsoft, which are racing to build out data centre infrastructure to serve demand for AI systems. Amazon’s capital spending in the fourth quarter was more than $26bn, up from about $13.5bn a year before. Its capital spending was roughly $78bn in 2024 overall, surpassing its pledge to spend $75bn.
Shares, which rose 41 per cent in the past 12 months, were down as much as 7 per cent in after-hours trading on Thursday before recovering somewhat to a decline of about 3 per cent.
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