Amazon’s overall earnings disappoint, but its server business is looking just fine

Amazon's AWS data center
Amazon's AWS data center Amazon Web Services
Things aren’t looking up at the company that Jeff Bezos built. During the Internet retailer’s earnings call on Thursday, the company reported disappointing profits of $1 per share in the fourth quarter of last year — far below Wall Street’s projection of $1.56. Amazon missed on revenue too, generating $35.75 billion instead of the $35.93 billion investors were expecting.

At fault were upward-creeping capital investments. Operating costs accounted for 3.1 percent of Amazon’s net sales, a climb from the third quarter 2015’s 1.6 percent. Q4 expenses totaled $34.64 billion overall, up from $28.74 billion a year ago.

The news isn’t all bad, though. Revenue was up 22 percent from the same period the year prior, when Amazon recorded net earnings of $29.3 million. And net revenue in North America climbed 24 percent to $21.5 billion while international earnings hit $11.84 billion on a 12 percent upswing. News on Amazon’s Web Services front, which comprises its cloud computing and Web hosting business, was particularly encouraging: The division notched revenue of $2.41 billion in Q4, up an impressive 69 percent year over year. It slightly beat Wall Street expectations of $2.38 billion.

Amazon’s Prime offering remains a veritable juggernaut. Memberships grew 51 in 2015, only a few percentage points under 2014’s expansion of 51 percent, and paid memberships in the U.S. grew 47 percent. The number of Prime subscribers now totals 54 million members in the United States, according to market research firm Consumer Intelligence Research Partners (CIRP).

Amazon will no doubt look to Prime for future growth — members on average spend about $1,100 on Amazon compared to $600 for nonmembers, reports CIRP. To that end, the company’s likely to maintain its longtime strategy of incentivizing sign-ups with a never-ending barrage of added benefits. Prime still gets you free two-day shipping and discounted one-day shipping, of course, but the company launched food delivery for Chicago-based Prime members earlier this week. Other perks include grocery delivery in eligible metros, a 20 percent discount on video games, unlimited photo storage, free monthly ebooks, and access to a growing library of original television, music, and movies.

Perhaps anticipating a leveling off in Prime growth, though, Amazon’s exploring new markets. Its had recent success in the hardware business after a few missteps: the company’s Fire TV set-top devices bested Chromecast, Roku, and the third-generation Apple TV in the first quarter of 2015 according to Strategy Analytics, and the company’s Alexa voice assistant-driven Echo speaker was the top-selling $100+ item on Amazon during Black Friday last year.

On the services side, Amazon’s reportedly hammering out the details of a $10 a month music subscription service — discounted for owners of an Echo speaker — to compete with Spotify, Apple Music, and others.

Home Theater

Google Chromecast returns to Amazon just in time for the holiday shopping crunch

It's been a chilly few years between Google and Amazon, but things may be improving. You can now buy two versions of Google's Chromecast on Amazon, something that hasn't be possible since 2015.

Today’s best Amazon deals: Garmin, Sony, and Bose

Black Friday and Cyber Monday may be over, but for retail giants like Amazon, the savings are only getting started. We've scoured the depths of Amazon to find you the very best deals going on right now.

These Amazon kitchen deals are perfect for Christmas gifts and healthy eating

Today is day 10 of Amazon’s “12 Days of Deals,” and it’s all about kitchen. From blenders to Instant Pots to KitchenAid mixers and more, practical yet highly coveted small appliances are available for up to 50 percent off.
Movies & TV

The best movies on Amazon Prime right now (December 2018)

Prime Video provides subscribers with access to a host of fantastic films, but sorting through the catalog can be an undertaking. Luckily, we've done the work for you. Here are the best movies on Amazon Prime Video right now.

A second Wells Fargo glitch results in the foreclosure of more homes

A computer error has struck Wells Fargo once again, resulting in hundreds more homes being mistakenly foreclosed after a first glitch was reported in August. To compensate one customer, the bank sent a check for $25,000.

Samsung partners with AT&T to create a multi-band 5G smartphone for late 2019

Ready to experience a radical transformation in mobile communication? AT&T is launching mobile 5G in cities across the country over the next few months. Here's everything you need to know about the AT&T 5G rollout.

Qualcomm's 3D Sonic fingerprint sensor could make your next phone more secure

Almost exactly a year after the launch of the Snapdragon 845, Qualcomm took the wraps off of its next-generation mobile platform, the new Snapdragon 855. The new chip puts an emphasis on A.I. performance.
Movies & TV

Movies Anywhere service adds Comcast films to its library and devices

Movies Anywhere lets you watch movies purchased from different services all in one place, and it just got even better with the addition of Comcast, which joins Microsoft, Amazon, iTunes, Google Play, Vudu, and FandangoNow.

Can Microsoft’s Airband Initiative close broadband gap for 25M Americans?

A new report from the Federal Communications Commission (FCC) says that 25 million Americans do not have access to broadband internet. Of these, more than 19 million are living in rural communities. Can Microsoft help out?

Amazon scouted airport locations for its cashier-free Amazon Go stores

Representatives of Amazon Go checkout-free retail stores connected with officials at Los Angeles and San Jose airports in June to discuss the possibility of cashier-free grab-and-go locations in busy terminals.

‘Ralph Breaks the Internet’ wins one of the worst box-office weekends of 2018

Wreck-It Ralph sequel Ralph Breaks the Internet stayed on top of the weekend box office for the third week, winning what was one of the worst weekends for ticket sales in the US so far this year.

Google+ continues to sink with a second massive data breach. Abandon ship now

Google+ was scheduled to shut its doors in August 2019, but the second security breach in only a few months has caused the company to move its plan forward a few months. It might be a good idea to delete your account sooner than later.

How to start your online business in 6 simple steps

Making the right choices now can greatly impact your success down the line, and the last thing you want to do is spend your energy revisiting old decisions instead of growing your company.

Chinese court upholds Qualcomm's complaint that Apple infringed on two patents

Apple is following the FTC's lead and has sued Qualcomm for a massive $1 billion in the U.S., $145 million in China, and also in the U.K., claiming the company charged onerous royalties for its patented tech.