Amazon said Andy Jassy, who runs the cloud division, will succeed Jeff Bezos as CEO of Amazon in the third quarter of this year.
U.S. stock index futures rose after the cash market close on Tuesday on the back of strong earnings from Amazon and Alphabet.
Amazon reported earnings nearly double Wall Street estimates; however, the stock move was tempered by news that Jeff Bezos would step down as CEO.
Shares of Alphabet gained 6% in afterhours trading after the technology giant reported 23% revenue growth and topped estimates for earnings.
Amazon’s Cloud Division Reports 28% Revenue Growth
Amazon’s cloud-computing business reported 28% revenue growth in the fourth quarter, falling short of analysts’ expectations.
Amazon Web Services remains the market leader for cloud computing and storage that companies, governments and schools use to run websites and applications. While Microsoft and Google grew faster in the fourth quarter, they’re still well behind Amazon in serving businesses that are rapidly offloading their data.
Revenue at AWS climbed to $12.7 billion from $9.95 billion a year earlier, below the $12.83 billion consensus estimate among analysts polled by FactSet. AWS revenue represented 10% of Amazon’s total sales.
AWS continued to drive much of Amazon’s profit. Operating income increased 37% from a year earlier to $3.56 billion, but trailing the $3.75 billion FactSet consensus estimate. That means 52% of the company’s operating income can be attributed to AWS, compared with about two-thirds in the same period a year ago.
In other news, Amazon said Andy Jassy, who runs the cloud division, will succeed Jeff Bezos as CEO of Amazon in the third quarter of this year.Advertisement
Alphabet Revenue up 23% as Core Advertising Business Shows Strong Growth
Shares of Alphabet, the parent of company of Google, rose nearly 8% in extended trading on Tuesday after the company reported fourth-quarter earnings that surpassed analysts’ expectations and showed a strong return to growth in its core advertising business.
Alphabet’s revenue grew 23% on an annualized basis in the quarter, according to a statement. That’s stronger growth than last year’s Q4, which came in at 17%, and shows Google’s advertising business is recovering well after a big showdown in Q2 of last year.
Alphabet also broke out operating income from its cloud business for the first time: the company lost $5.61 billion during the full year, and $1.24 billion during Q4, showing that the business is still in investment mode. By way of contrast, Amazon’s cloud business earned an operating profit of $13.53 billion last year and $3.56 billion last quarter.