Amazon shares soar to new high on profit jolt
Amazon shares jumped to a record high in after-hours trading in the United States, and New Zealand’s retail association has warned local stores not to be complacent about its future impact.
Amazon shares rose 6 per cent to a high of US$1477 (NZ$1995) after it reported a fourth-quarter profit that was more than double analysts’ expectations and a 38 per cent jump in its quarterly sales to more than US$60 billion.
The share-price jump reversed a 4 per cent decline in Amazon’s shares during normal trading hours on the Nasdaq exchange overnight on Thursday, before the profit announcement.
Amazon’s much-vaunted launch into the Australian market in December so far appears to have proved something of an anticlimax.
The company opened a distribution centre in South Melbourne two months ago that is the size of three rugby pitches, but doesn’t seem to have bowled over Australian consumers with the range and prices of locally-stocked goods.
Many goods on the Australian website are marked as not available for shipment to New Zealand.
Amazon Australia head Rocco Braeuniger was not available for comment.
Retail NZ spokesman Greg Harford said the opening of the Melbourne warehouse was a bit of a ‘‘soft launch’’ and hadn’t had a big impact in New Zealand yet.
‘‘We haven’t heard too much about Amazon since the launch. I think the reality is it was ‘here’ anyway, and the fact they have got the Australian site doesn’t necessarily mean Kiwis are more likely to shop there – they could be shopping on Amazon anyway.’’
But he said New Zealand retailers could not be complacent, and he expected Amazon would open more centres in the region over time.
Amazon’s Australian fulfilment centre covers 24,000 square metres, while it has more than 1 million sqm of warehousing in Britain and almost 10 million sqm in the United States.
‘‘They have certainly indicated they are planning multiple distribution centres. Irrespective of whether they are targeting Kiwi customers particularly, it will be easier for them to do that once they have more infrastructure in place,’’ Harford said.
Amazon listed its Australian launch as the 23rd item in a series of ‘‘highlights’’ for the quarter and it was not discussed during a conference call on the company’s results hosted by chief financial officer Brian Olsavsky yesterday.
Chief executive Jeff Bezos made most mention of its Alexa ‘‘intelligent personal assistant’’, which goes on sale with its Echo speaker in New Zealand this month.
‘‘Our 2017 projections for Alexa were very optimistic, and we far exceeded them,’’ Bezos said.
‘‘We don’t see positive surprises of this magnitude very often – expect us to double down.’’
Amazon’s quarterly profit of US$1.9b for the three months to the end of December was up from US$749 million in the same period in 2016, bolstered by a US$789m gain from US tax changes.