Amazon’s online sales fell 1% in the fourth quarter ended December 31, 2021, compared to record highs in the fourth quarter of 2020. Revenue in the group was $66.08 billion, down from $66.45 billion in the final quarter of 2020.
Amazon’s online segment was its only category to see a decline in the quarter. Amazon Web Services continues to be the company’s big driver of sales and earnings, with revenue in the quarter jumping 40% and profits soaring 47%. For the entire company, sales rose 9%, to $137 billion, in the quarter, while operating income dropped 50%, to $3.46 billion.
In prepared remarks, Amazon CEO Andy Jassy pointed to higher costs “driven by labor supply shortages and inflationary pressures” for the decline in operating income, adding that those issues “persisted into the first quarter due to Omicron. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic.”
Higher costs also cut into earnings growth for all of 2021, with operating income increasing 9%, to $24.9 billion, compared to revenue growth of 22%, with sales nearing $470 billion.
Looking at the first quarter of 2022, Amazon said it expects sales to grow between 3% and 8% compared with last year's Q1. Operating income is expected to be between $3.0 billion and $6.0 billion, compared with $8.9 billion in first quarter 2021. The guidance includes approximately $1.0 billion lower depreciation expense.