Executive Summary

• Amazon reported EPS of $1.00 for the fourth quarter of 2015, well below the consensus estimate of $1.55. Higher fulfillment expenses and technology and content expenses weighed on profits.
• Revenues came in slightly below expectations, at $35.7 billion, an increase of 22% versus the year-ago period, and were led by Amazon Web Services sales, which were up 69%.
• In 2015, worldwide Prime memberships increased by 51%. They increased by 47% in the US and even faster internationally.
• For the first quarter of 2016, management expects total sales of $26.5–$29.0 billion, representing growth of 17%–28%, versus consensus of $27.68 billion. Operating income is expected to be between $100 million and $700 million versus consensus of $665.3 million.