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Amazon's Bombshell Announcement Overshadowed its Breakout Results

By Danny Vena - Feb 17, 2021 at 3:00PM

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Investors were focused on the pending departure of Jeff Bezos. The financial results were worth a look as well.

Amazon (AMZN 3.66%) stunned investors earlier this month when it revealed that Jeff Bezos would step down as CEO and assume the role of executive chairman. Andy Jassy, CEO of Amazon Web Services (AWS) will assume the role of CEO, with the transition scheduled for the third quarter. The announcement eclipsed the company's fourth quarter results, as Amazon closed out the year on a high note.

On this clip from Motley Fool Live recorded on Feb. 3, "The Wrap" host Jason Hall and contributors Danny Vena and Brian Stoffel recap Amazon's superb financial results.

Jason Hall: Let's talk about Amazon's financial results, a little bit about the transition, and then I've got some questions for you.

Danny Vena: Well, obviously, the big shot heard around the world yesterday was about Jeff Bezos relinquishing his role as CEO. But Amazon reported its earnings and that got drowned out.

If you look at Amazon's earnings for the fourth quarter, net sales grew to more than $125 billion, up 44% year-over-year. That actually accelerated from the 37% gains that happened in the third quarter. Now, it's not necessarily apples-to-apples comparison this year, because in the fourth quarter, Amazon got a boost from Prime Day, which happened in October this year, when it typically happens in July. That probably accounts for the majority of that increase.

Net income doubled to $7.2 billion, and free cash flow for the trailing 12-month period increased to $31 billion.

Essentially, if you look at what was happening across the board, Amazon did really well for the quarter and probably, well, definitely even better than what analysts were expecting. I think it's hard to focus on that with so many analysts talking about how Amazon is going to fair going forward based on what's happening with Jeff Bezos.

But some of the things that if you look at, for instance, Amazon's net sales over the course of the full year were up 38%. That's a mind-boggling number, $386 billion. They added $100 billion in business over the course of the year. That's an incredible number.

I want to stop there so we can focus more on what the questions that are on everybody's mind about Jeff Bezos. But suffice it to say that the quarter was fabulous and we can expect more good things from Amazon's financial results going forward.

Jason Hall: Yeah. I want to put that revenue dollar growth in perspective. Target, 12-month trailing revenues, $89 billion. Amazon just added a Target over the past year. [laughs]

Brian Stoffel: Not only that, but they said that in the first quarter, they expected it could grow up to 40%. Are you kidding me? 40%? And when you consider that they get so much money from third-party as opposed to first-party, it's just mind-boggling.

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