Thursday 31 January 2019 10:49 pm | Updated: Monday 03 June 2019 2:25 am

Amazon presents a mixed bag to investors after record holiday sales

E-commerce behemoth Amazon predicted lower-than-expected revenue for the current quarter tonight, despite reporting record sales for its busiest period of the year.

Revenue for the three months to 31 December rose 19.7 per cent year-on-year to hit $72.4bn (£55.1bn), boosted by events such as Black Friday and Christmas and topping consensus estimates of $71.9bn as polled by Refinitiv.

Subscription fees for its premium Prime service jumped 25 per cent to $4bn, as Amazon surpassed 100m Prime members globally.

However founder Jeff Bezos cast a shadow on Amazon’s future, adding that sales for its first quarter would come in below expectations at between $56bn and $60bn. Wall Street had predicted $60.7bn, and noted that revenue growth had slowed in some parts of Europe during the busy festive season.

"Prime members not only provide a useful recurring revenue stream, but tend to be cheerleaders for the wider Amazon offering," said Hargreaves Lansdown equity analyst Nicholas Hyett.

"That includes the incredibly successful Alexa devices – which had a truly bumper Christmas. But while the retail business attracts the headlines, it’s still Amazon’s less well known cloud computing arm that pays the bills."

The tech firm’s net income rose to $3bn for the fourth quarter, up from $1.9bn a year earlier. Profits at Amazon Web Services, its world-leading cloud services division, beat estimates at $2.2bn.

Amazon’s share price fell almost two per cent in after-hours trading.

"With so many opportunities, the biggest problem facing Amazon CEO Jeff Bezos is where to focus the attention," Hyett added.

"Amazon has lots of hungry mouths crying out for investment, and efficient capital allocation is vital in the years to come. That’s a pretty nice problem to have though."