Only one question loomed over Amazon as investors waited to hear its holiday results: Just how great was it going to be?
The answer was revealed Thursday afternoon: not quite as great as hoped.
Traditional retailers, and even some e-commerce ones, are suffering. Walmart is closing 269 stores. Macy’s is cutting 4,500 jobs and shutting dozens of stores. EBay just dashed expectations for the year. Against such troubles, Amazon had a much less serious problem: Expected to romp, it merely did well.
Revenue for the fourth quarter jumped to $35.7 billion, up 22 percent from $29.33 billion. Analysts had predicted a little bit more: $35.93 billion.
Profit — traditionally something Amazon cared little about as it invested for the future — was expected to be good for once. Analysts estimated the retailer would earn $1.56 a share, up from 45 cents in 2014. But the company said fourth-quarter profits were only $1 a share.
Investors did not like what they saw. In giddy anticipation of good news, Amazon shares surged more than $50 during regular trading Thursday, or nearly 9 percent, to $635. But after-hours, the stock promptly lost all of the day’s gains, falling more than 14 percent.
Amazon’s computing platform subsidiary, Amazon Web Services, contributed heavily to the bottom line. Operating income from that unit rose to $687 million in the quarter from $240 million in 2014.
To put Amazon’s 22 percent revenue growth into perspective, when Walmart reports its holiday sales, they are forecast to actually be down for the quarter from 2014.
Amazon, based in Seattle, is the powerhouse of e-commerce, yet paradoxically has only a small share of the worldwide market — which is one of the things feeding enthusiasm for it. For Amazon bulls, there are so many more worlds to conquer.
In data assembled before the fourth-quarter results were in, the research firm eMarketer said Amazon had $71.8 billion in e-commerce sales over the last 12 months, an increase of 5.6 percent from the previous 12 months. Walmart, by contrast, had revenue of $13.5 billion online during the period.
But Amazon’s revenue pales against the worldwide e-commerce market, which eMarketer estimated as $1.672 trillion last year. In 2016, the global market is forecast to rise above $2 trillion.