Today's stock market
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Amazon reports strong results but disappoints with short-term guidance
Amazon beat expectations for fourth-quarter results but gave tepid guidance for Q1, and shares fell 5.4%. Net sales grew 19.7% to $72.4 billion and earnings per share increased 61% to $6.04. Analysts were expecting earnings of $5.67 on sales of $71.9 billion.
North American sales grew 18%, international sales were up a strong 19% excluding currency, and the company's highly profitable Amazon Web Services grew revenue by 45% to $7.4 billion. Sales in the "Other" category, which is mainly advertising, grew a whopping 97% excluding currency, to $3.4 billion. Operating income in the quarter soared 78% year over year and free cash flow for the full year grew 134%.
Amazon forecast first-quarter sales between $56 billion and $60 billion, which was less than the analyst consensus of $61 billion and may have gotten investors worried about slowing sales growth despite soaring profits. The company also said in the conference call that it expects to increase investments in operational efficiencies relative to what it spent in 2018.
ExxonMobil grows profits on rising production
ExxonMobile handily beat Wall Street expectations for profit in the fourth quarter despite a drop in oil prices, and shares rose 3.6%. The company earned $1.41 per share, which was down from $1.97 in the period a year ago but well above the $1.08 analysts were expecting.
Excluding the effect of tax reform and asset impairments, earnings actually rose 72% to $6.4 billion. Lower prices for crude were offset by higher production volumes, especially in the Permian Basin, where production was up 12% from last quarter and 93% from Q4 2017. Exxon also benefited from higher gas prices and improved efficiencies in its refining operations due to integration of logistics and manufacturing.
Revenue of $71.9 billion was an 8.1% increase over last year, but missed the analyst estimate of $78.4 billion. Still, Exxon's ability to increase production and generate profit growth, along with its strongest cash flow from operations and asset sales since 2014, had investors encouraged today.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jim Crumly owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.