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Amazon Profits Wafer Thin As Revenues Soar, AWS Biggest Contributor

Amazon who are currently tipping millions moving into new markets including Australia, has seen their shares rise 7% after reporting a 35% lift in US revenues and a 29% lift in International sales.

Overall profits were a mere 0.8% which is a concern for investors.

Revenue overall increased 34 percent from last year, due in part due to the $1.3 billion in sales from Whole Foods, which Amazon acquired in late-August.

The biggest earner for the online retailer did not come from shopping, but the Companies Amazon Web Services which grew by 42%.

It’s also been revealed that Amazon’s cloud business is the company’s most profitable unit, this division allows it to keep investing in growing their retail sales operations.

Investors have continued to give a pass on Amazon’s laser-thin profits.

Operating profit dropped in all three major segments, by 40 percent in total to $347 million, as operating expenses grew 45 percent from a year ago. That resulted in an operating margin of just 0.8%, the lowest since September 2014.

Still, Amazon shares were up by as much as 8 percent in extended hours, and have grown 30 percent year-to-date.

Amazon also broke out physical store sales for the first time, posting $1.3 billion in revenue, which primarily came from Whole Foods.

Amazon said it added 160,000 employees in the last three months (roughly 87,000 from Whole Foods), ahead of the all-important holiday seasons.

Amazon gave fourth quarter guidance in the range of $56.0 billion and $60.5 billion, right in-line with street estimates of $58.9 billion.



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