Amazon Hits Record Breaking Profits After Push From Cloud And Ad Businesses

Amazon Hits Record Breaking Profits After Push From Cloud And Ad Businesses

"I have felt recently that people weren't paying [enough] attention to the profitability story at Amazon". Its profit increased to $2.5 billion in the second quarter, or $5.07 per diluted share, compared with net income of $197 million in second quarter 2017.

Profits rose 12-fold from a year earlier, while second-quarter revenue climbed 39 percent to $52.9 billion.

The AWS division generated US$1.64 billion in operating income for Seattle-based Amazon during the second quarter, compared to US$916 million during the same period of 2017. In 2014, Amazon lost $131 million.

Amazon's priorities for the ad business, include building better tools for advertisers to buy ads and better measurement to prove the ads work, Olsavsky said.

Olsavsky also pointed to the company's advertising products as contributing to gross profit while "growing at a rapid clip". Amazon even trimmed losses in its worldwide business while funding expansions in India, Australia, the Middle East and Brazil.

For most of Amazon's existence, Bezos preached nearly constant investment in new businesses at the expense of near-term profit. Institutional ownership refers to the ownership stake in a company that is held by large financial organizations, pension funds or endowments.

All of this growth comes as Amazon does something that once seemed unthinkable: it consistently turns a profit. But new businesses have helped too. The company's physical stores brought in $4.3 billion, most of which came from its Whole Foods grocery chain.

And its advertising business continued to surge.

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That all means investors no longer shudder when sales growth falters. In the second quarter of 2018, it grew by only 17%. Amazon's share price rose over four per cent in after-hours trading.

The artificial intelligence-powered assistant started life as the heart of Amazon's Echo line of smart speakers, but is now becoming increasingly integrated into other devices.

According to the research firm eMarketer, Amazon's e-commerce revenue will grow more than 28% this year to reach $394 billion, and will account for 49% of U.S. online retail sales and almost 5% of all retail spending. "We think it's driven by the Prime program, as well as increased selection, particularly third-party selection".

Amazon continues to expand grocery delivery from Whole Foods Market to more than 20 cities in the USA, offering customers fast delivery on natural and organic products through Prime Now.

Technical indicators do not lead us to assume the stock will see more gains anytime soon. Bezos owns the Washington Post, which frequently publishes hard-hitting investigative pieces about Trump and his administration. Net sales for Amazon Web Services or AWS made $6.1 billion, more than projection figures of $6 billion.

During this year's Prime Day, Amazon said the July event saw Prime members purchase more than 100 million products.

Prime members spend above average on Amazon.

The increased cost of Amazon Prime, announced at the end of the last quarter, did not appear to damage subscription revenues, which grew 57% to $3.4bn. First-quarter growth was 56 percent. Sales from Whole Foods, which was acquired a year ago, was roughly $4.3 billion during the quarter. Bezos is trying to convince investors that he can replicate that US dominance overseas.