Following an extremely strong 4th quarter earnings report where the online giant beat revenue estimates by $1.35 billion and EPS by $2.51, Amazon’s stock price jumped more than 8% on Friday morning, January 31. That moves Amazon’s valuation back over the $1 trillion mark, joining only Alphabet (Google), Apple, and Microsoft as the only U.S. companies with a value that high.
Amazon provided a short update on Amazon Business, the B2B arm of Amazon. Amazon rarely gives updates on the B2B offering, but in its earnings press release, it reported, “Amazon Business launched in Canada and now serves commercial and public sector organizations of all sizes in Canada and eight other countries, including the U.S., U.K., Germany, France, Italy, Spain, Japan, and India. Amazon Business also launched Business Prime in Canada. Business Prime offers member-only benefits to help save time and money, in addition to unlimited fast, free shipping on eligible items for every member on the account.” tED magazine first reported Amazon Business started offering “Business Prime” in the United States in October of 2017.
During its earnings conference call, Amazon did talk about its ongoing issues with delivery and ways to deliver products faster. Last summer, Amazon spent $800 million on research to expand one-day delivery service, and we now know the investment did not stop there. “We had talked about last year about an initial step-up in cost of close to $800 million in the second quarter. We — that carried into Q3. It was slightly higher in Q3. And then in Q4, last time on this call I mentioned that we estimated Q4 would be $1.5 billion penalty. It was slightly under that despite the higher volumes and revenue growth than was in our guidance,” Brian Olsavsky, Chief Financial Officer, told reporters. “And looking ahead to Q1, we estimate approximately $1 billion of additional costs year-over-year. And again, in Q2, we’ll start to lap this. And that doesn’t mean the delta goes to zero. It means that, there’ll be a step-up as we grow and expand on a volume basis and then we’ll see where our rates are on actually delivering and fulfilling one-day. So, I will keep you posted on our results and guide in the future as to where we see those costs going.”
Olsavsky concluded by saying Amazon wants to expand the one-day delivery option to more cities in 2020.