The markets were able to breathe, Amazon is doing well in a rather gloomy context. The American giant has published (pdf) fourth quarter 2021 and full year results on February 3. They are in line with investors’ expectations. After falling before the earnings release, the company’s share price soared 14% afterwards.
Amazon is struggling to recruit
2020 has been an exceptional year for Amazon. The Covid-19 pandemic and lockdowns around the world have largely favored the eCommerce and cloud champion. The habits acquired during this very special year seem to have taken root, according to the company’s 2021 results: a turnover of 470 billion dollars, up 21% and 33 billion in profits, i.e. more than 57%.
Boosted by the pandemic, e-commerce continues to grow in France
The fourth quarter reflected this successful year with revenue of $137.4 billion, the fifth quarter in a row above $100 billion. Earnings doubled to $14.3 billion.
Yet all was not won for Amazon. Andy Jassy, the group’s new CEO told analysts, “ As expected, we saw rising costs due to labor shortages and inflationary pressures “.
The Covid and its particularly infectious Omnicron variant associated with the “Great Resignation” movement in vogue in the United States, more than 4 million resignations per month between July and November, led to a shortage of labor.
According to Brian Olsavsky, chief financial officer of Amazon, the lack of arms cost the company $4 billion. The latter has however made efforts with an attractive salary of 18 dollars in the United States and recruitment bonuses. However, it did not go so far as to review its anti-union policy. The company now has 1.6 million employees worldwide.
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The cloud, the other flagship sector of Amazon next to eCommerce is in great shape. Its revenue rose 40% in the quarter to $17.8 billion in revenue.
A small peculiarity of its publishing results at the end of 2021, Amazon for the first time released its advertising revenue from the “Other” catch-all section. And for good reason, these have taken on a first-rate importance, 7% of its turnover, with 9.7 billion dollars, up 32%. Amazon mainly offers its customers to pay to be highlighted in the search results of its eCommerce site.
The Seattle company is now well established in third place among players in the sector behind Google and Facebook. Climbing the rankings may be complicated. Advertising generated $61.2 billion and $32.6 billion respectively in the fourth quarter, despite Apple’s new privacy measures. Nevertheless, Meta, the parent company of Facebook, is going through a complicated end to the year with disappointing results for the markets.
Last point to note, Amazon has benefited from a good return on investment. The company has invested $1.3 billion to take a 22.4% stake in Rivian, an electric carmaker. The latter made a very good entry into the market in November.
Omnicron, recruitment and supply difficulties, will continue to weigh on Amazon in the first quarter of 2022. Sure of its extremely favorable position, the company is still counting on 112 to 117 billion dollars in turnover. Analysts, probably reassured by this fourth quarter, put on 120 billion dollars in revenue.