Every quarter it’s amazing that strong growth is still possible. The US technology group Amazon, which is also the world’s largest online retailer, showed it again with its annual balance sheet on Friday: In the past financial year, the company increased sales by almost 22 percent to 470 billion dollars (411 billion euros). The operating result increased by almost nine percent to 24.9 billion dollars (22 billion euros).
While analysts had expected more, they were pleased at the prospect of higher fees for Prime membership in the US (not yet in Europe). The service, which offers access to free shipping and streaming services, among other things, is becoming significantly more expensive there: New US customers should pay $14.99 instead of $12.99 per month from February 18.
The profits from the stake in the electric car manufacturer Rivian more than offset the below-expected earnings growth, analysts said. With Rivian, Amazon was able to book high special proceeds.
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The cloud business Amazon Web Service (AWS) contributes a large part to the success. With this profitable rental of server performance to other companies, investments in your own infrastructure can be cross-subsidised. The division delivered three-quarters of the group’s profit last year, although it accounted for only 13 percent of sales.
Staff shortages persist
Amazon had significantly higher expenses than in the previous year due to its investment and hiring offensive. “As expected, we had higher costs, driven by tight labor markets and inflationary pressures,” Amazon CEO Andy Jassy is quoted as saying in the annual report. Due to the rampant omicron virus variant, these problems are likely to continue in the current quarter.
However, the personnel problems of what is now the second-largest US employer behind Walmart are by no means only due to the corona crisis. Employees change very quickly, especially in logistics – as part of the corporate strategy. Around 140,000 employees were newly hired in the fourth quarter of 2021 alone. This regular exchange of large parts of the employees prevents them from standing up for their rights and demanding higher wages. But that is exactly what the group is now threatened with: From this Friday until March 25, the employees of a logistics warehouse in the state of Alabama can vote again on whether there should be a US union at Amazon for the first time. The initiative had already failed once in 2021. Overall, Amazon now has more than 1.6 million employees worldwide.
Good prospects
The US investment bank Goldman Sachs has raised the price target for Amazon from 4100 to 4200 US dollars and left the rating on “buy”. The online retailer presented solid figures for the fourth quarter, with strong Christmas business and encouraging statements for the first quarter. The US bank JPMorgan has raised the price target for Amazon from 4350 to 4500 US dollars and left the rating at “overweight”.
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