Amazon.com's one-day delivery was all about speed and efficiency. The result was a great feedback from its growing fanbase, especially during the holiday shopping season.
The e-commerce giant was on course to a $1 trillion valuation after the company posted earnings of $6.47 a share late Friday, beating the $4.04 estimates by FactSet, and hitting a new $87.4 billion revenue for the quarter. There's no stopping Amazon.com's sales growth, Wall Street analysts on Friday, said.
According to Chief Financial Officer Brian Olsavsky on the earnings projections, what the company saw was fundamentally a very solid holiday sales starting mid-November, adding "we also had a huge uptick as a result of the one-day shipping that has been building through the year."
Amazon.com Inc was also able to "pinch in a few pennies," especially with the cost for reducing free Prime deliveries down to one day from two came in below the estimated $1.5 billion.
Olsavsky pointed out that in the fourth quarter, the last time Amazon was on such earnings call, executives projected the company would be in a $1.5 billion bind. Turns out the expectation came in slightly below that range, despite the rising volumes as compared to their guidance, they said.
The report sent Amazon shares soaring almost 10 percent late Friday to reach an intra-day peak of $2,055.72. Market observers are figuratively passing out over the results, with anticipations confirmed about the company's new and faster shipping time.
Amazon's net profits were up 21 percent to US$87.4 billion, with earnings from AWS - the business unit responsible for selling data storage and Cloud computing power - climbing 35 percent. The company's sales from subscription fees rallied 33 percent as more customers signed up for Prime Services.
JPMorgan analyst Doug Anmuth elevated his Amazon price target to $2,525 from $2,200, and said the tech and e-commerce titan remains one of the brokerage's most attractive choices in its US-focused list.
KeyBanc rates Amazon stock as overweight, with a $2,400 price goal, an increase from $2,200. AWS, the analyst said, was a big driver, with Amazon reminding its competitors of its presence and size, but the major surprise was cost controls around its one-day shipping boost.
Meanwhile, Amazon has darted in and around the US$1 trillion elite organization for quite some time now, along with other tech behemoths like Apple, Microsoft and Alphabet. Traders and investors are touting MasterCard and Visa as the next corporate giants expected to join the trillion-dollar club.
