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Berkshire Holding Amazon Rockets on 4th-Quarter Earnings Beat

Shares of Amazon.com Inc. (NASDAQ:AMZN), the Seattle-based e-commerce retail giant, skyrocketed in aftermarket trading on Thursday as the company reported fourth-quarter 2019 revenue and earnings that smashed earnings estimates.

For the quarter ending December 2019, the company reported net income of $3.3 billion, or $6.47 in diluted earnings per share, compared with net income of $3 billion, or $6.04 in diluted earnings per share, in the December 2018 quarter. Earnings outperformed the Refinitiv consensus estimate by $2.44 per share, while revenue of $87.44 billion outperformed the consensus estimate by $1.42 billion.


Company accelerates sales during the holiday quarter, boosted by Prime membership growth

Amazon said net sales for the full year were $280.5 billion, up 20% from 2018, driven by accelerated growth across several businesses, including Amazon Web Services, Fire TV and Prime.

CEO Jeff Bezos said that the number of Prime members reached over 150 million and that the number of items delivered to members with Prime's free one-day and same-day delivery increased fourfold from fourth-quarter 2018 to fourth-quarter 2019. Best-sellers during the holiday season included the Echo Dot, Fire TV and Echo Show 5. Amazon's Fire TV users increased to 40 million active users, with automakers like Bayerische Motoren Werke AG (XTER:BMW) and Fiat Chrysler Automobiles NV (NYSE:FCAU) incorporating the new Fire TV in future vehicles.

Amazon also announced that Fresh, which previously cost $14.99 month, is now a free benefit for its Prime members. Bezos added that members from over 2,000 U.S. cities can access free two-day delivery from Fresh and Whole Foods Market, with grocery deliveries increasing over 100% in the fourth quarter year over year.

Prime members in Brazil accelerated since the company launched Prime service in the South American country in September.

Stock climbs above $2,000 per share in aftermarket trading, sending market cap above $1 trillion

Amazon shares traded at an aftermarket high of $2,113.00, up over 12.9% from the closing price of $1,870.68 on the earnings beat and upbeat revenue guidance of between $69 million and $73 million for the March quarter. Based on a shares outstanding count of 495 million, the implied market cap for Amazon is approximately $1.045 trillion, propelling the retail giant to a club of few companies that have crossed the trillion-dollar mark. Other companies in the trillion-dollar club include Google parent Alphabet Inc. (NASDAQ:GOOG)(NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL) and Microsoft Corp. (NASDAQ:MSFT), the company founded by Bill Gates (Trades, Portfolio).


Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway Inc. (NYSE:BRK.A)(BRK.B) has not released its fourth-quarter portfolio report as the deadline is 45 days after the quarter ends.


Company profitability remains strong

GuruFocus ranks Amazon's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank, expanding profit margins and a return on equity that outperforms 89.73% of global competitors.


Other gurus that are riding Amazon's strong profitability include Ken Fisher (Trades, Portfolio), Spiros Segalas (Trades, Portfolio) and Andreas Halvorsen (Trades, Portfolio).


Disclosure: No positions.

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This article first appeared on GuruFocus.