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Amazon's cloud continues to grow


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Amazon's cloud continues to grow Inc.'s cloud computing platform, Amazon Web Services, has reached a $14 billion annual run rate, CFO Brian Olsavsky said in a Feb. 2 earnings conference call.

Amazon saw fourth-quarter 2016 AWS net sales of $3.54 billion, up from $2.41 billion in the year-ago quarter. AWS operating income increased to $926 million from $580 million a year ago. AWS posted $12.22 billion in sales for full year 2016 and $3.11 billion in operating income.

"We've got a very broad base of customers from startups, to small-medium businesses, to large enterprises, to the public sector, and we are continuing to see strong growth across all those sectors," Olsavsky said, adding that the business is now in 42 availability zones in 16 geographic regions, and the company will continue to grow it globally.

The CFO said the company made seven AWS price reductions in the fourth quarter 2016, and "that's going to be constant in this business." Amazon also introduced 308 new services and features for AWS in the fourth quarter, bringing the total number of launches in 2016 to 1,017.

Overall, the online retail giant's fourth-quarter 2016 net sales came to $43.74 billion, up 22% from $35.75 billion in the prior-year quarter. Excluding foreign exchange impact, net sales would have grown 24% year over year. For full year 2016, net sales totaled $135.99 billion, up 27% from $107.01 billion reported in 2015. Full-year net sales grew 28%, adjusting for foreign exchange impact.

Amazon posted quarterly net income of $749 million, or $1.54 per share, up from $482 million, or $1.00 per share, in the year-ago period. For full year 2016, the company saw $2.37 billion in net income, or $4.90 per share, compared to $596 million, or $1.25 per share, in 2015.

The S&P Capital IQ consensus GAAP EPS estimates for the fourth quarter and full year 2016 were $1.40 and $4.76, respectively.