Bezos steps aside after living high on the hog
Jeff Bezos has some solid timing. The founder and chief executive of Amazon.com is handing over the CEO role to Andy Jassy, head of the cloud division AWS, after a fortuitously good year at the $1.7 trillion retail giant.
The new boss will face a different, more challenging normal that includes regulatory scrutiny.
First the results: Amazon said Tuesday that fourth-quarter revenue rose 44 per cent year-over-year to $126 billion.
That's the first time the company topped $100 billion of sales in a quarter helped by delivering items to customer's doorsteps during the pandemic and, of course, the holidays.
That's the good news. The rest harkens some major challenges for Jassy. Operating expenses ballooned 42 per cent in part because costs associated with worldwide shipping rose about two-thirds.
The vaccine rollout will coincide with choice, which could make life harder for Amazon.
The company is forecasting sales volume to drop by a quarter in this period compared to three months ending December.
The hurdles may partly be why Jassy is now leading the company.
AWS is one of Amazon's jewels.
Growth slowed a tad in the fourth quarter to 28 per cent, but the division has much higher margins than Amazon's other units, booking more than half of its operating profit despite accounting for just 12 per cent of total sales.
And yet Amazon's success is precisely what will make Washington continue its pursuit of the retail giant.
On the same day as earnings, Amazon agreed to pay more than $60 million to the Federal Trade Commission to settle charges it withheld some tips from drivers.
Time away from the corner office will give Bezos the opportunity to focus on his other projects including the Bezos Earth Fund and the Washington Post.
He will likely continue to have a guiding hand, too, and perhaps will find himself in the Beltway hot seat.
Still, the company's forward enterprise value-to-sales figure is hovering near its high, hit earlier this year. As Bezos steps aside, Amazon is staring at the end of living high on the hog.
