Amazon Stock Price Plummets Despite Tremendous Success
Friday, January 29, 2016 at 10:31AM After the market’s close on Thursday, Amazon.com Inc. reported fourth quarter earnings that missed expectations and the company’s stock plunged 13%. Wall Street analysts were forecasting record revenue of $35.9 billion for the company. Amazon did hit a new revenue record, but it missed expectations with sales of $35.7 billion.
That’s despite successes that were in stark contrast to their competitors. Amazon posted record profit last quarter and double-digit sales growth over the previous year. Prime memberships grew by 51% last year and according to a Consumer Intelligence Research Partners study, just under half of all U.S. households subscribe to prime.
Amazon Web Services, which boasts big name customers like Netflix, Airbnb, Major League Baseball, Expedia and Yelp, grew from 1.4 billion in 2014 to 2.4 billion in 2015, a 71% increase.
The biggest part of Amazon remains its retail business, and it’s smart home assistant, Echo, is poised to become the company’s third billion-dollar business soon. Echo has only been widely available for about 7 months but it consistently ranks high in Amazon’s best sellers list. It is a virtual assistant and audio speaker that lets you control and connect with other services through your voice. Echo was one of the surprise stars at this year’s Consumer Electronics Show and will be prominently featured in the online store’s first-ever Super Bowl ad.