Report and earnings from the advertising business

Amazon shares jumped more than 14% after reporting holiday quarter earnings above analysts' forecasts and a profit of almost $12bn from its investment in Rivian.

Amazon's overall revenue growth rate slowed from previous quarters, with earnings per share doubling, which was a pleasant surprise to investors.

Amazon (AMZN) shares, down 16.7 per cent since the start of 2022, jumped 14.24 per cent in the post-market on Thursday.

The company's report

For Q4 2021, Amazon's earnings per share jumped 97% to $27.75, compared with a figure of $14.09 in Q4 2020. The average forecast by Wall Street analysts was $3.58 earnings per share.

Total earnings (net income) rose to $14.3 billion, up from $7.2 billion in the fourth quarter of 2020. The bulk of this profit comes from an $11.8 billion equity investment in electric car maker Rivian Automotive (RIVN), whose successful IPO completed last November. Had it not been for Rivian, Amazon would have reported a drop in profits in its most important holiday quarter of the year.

Amazon's revenues rose 9 per cent to a record $137.4bn against expectations of $137.6bn, but this marked the third consecutive quarter of slowing growth.

Forecasts from Amazon

The company has provided a conservative forecast for the first quarter of 2022, with an eye on the risks of the COVID Omicron strain spreading, potential supply disruptions and rising inflation.

Amazon forecasts total sales for the current quarter to be in the $112bn-$117bn range, implying a 3-8% increase over the first quarter of 2021, but below the average analyst estimate of $120bn.

Amazon divisions

Amazon's e-commerce revenues this holiday quarter fell slightly to $66.075bn from last year's $66.451bn.

Revenues from physical shops rose 16.6% to $4.7bn. Revenue from Amazon Prime subscription services rose 15% to $8.1bn.

Amazon revealed for the first time the revenues of its advertising business, which has been growing at a significant rate in recent years and generated $9.72bn in the past holiday quarter.

Amazon Web Services' cloud division, the company's second-largest revenue, reported a 40% rise in sales to $17.78bn for Q4.

Additionally, Amazon has announced an increase in the cost of its Prime membership for new subscribers for the first time in four years, effective February 18. Prime's annual subscription will now increase from $119 to $139.