Amazon Reports Record Profits As OZ Launch Gets Closer
Amazon who is currently scoping the Australian market with a view to launching a local version of their online store, has reported a massive surge in profit, a major contributor is the Companies
Web services division who is this week holding a major conference in Australia.
The USA Company reported a profit of US$513 million for the quarter, Vs a year-ago loss in the same quarter of $57 million.
In the last quarter, the online retailer delivered US$482 million which was its previous best-ever quarter.
Sales of US$29.13 billion, was up 28% from a year ago, this surpassed Amazon’s own forecast of $26.5 billion to $29 billion and analysts’ expectations of $27.98 billion.
The results were boosted by its Amazon Web Services cloud computing division, where sales surged 64%. The division is proving extremely popular in Australia.
The AWS unit, which rents computing power to a variety of start-ups, government agencies and other corporations, has become a major driver of sales growth and profits for Amazon.
Shares of Amazon, up 40% over the past year, jumped 12% to $671.58 in after-hours trading.
The Wall Street Journal said that for the current quarter, Amazon expects sales between $28 billion and $30.5 billion, up between 21% and 32% from a year ago.
Analysts, on average, were expecting sales of $28.33 billion, according to Thomson Reuters.
Though Amazon has won over Wall Street by consistently bringing in billions in new sales each quarter, it still suffers from a reputation as a profit miser as it plows most of its collected money into product development, hiring and warehouse development. But the company has delivered profits in four straight quarters, including its largest profit ever last year, while demonstrating some spending restraint.
Amazon continues to build new warehouses and streamline shipping and logistics operations.
ChannelNews understands that the Company is currently talking to Australian distributors, Logistic Companies and commercial real estate agents.
The US Company is also looking to make more of its own deliveries by truck and plane as it challenges United Parcel Service, and FedEx. Amazon also is working to bring in new members to its Prime unlimited shipping service with proprietary television content and monthly-plan offers released just earlier in April.
AWS sales were $2.57 billion, up from $1.57 billion a year ago and above the average analyst estimate of $2.54 billion on FactSet. Operating profit, before stock-based compensation, increased to $716 million from $265 million.
Chief Executive Jeff Bezos has said he expects AWS to reach $10 billion in sales this year, even as Microsoft., Alphabet, and others ramp up pressure.
Amazon still spends heavily to get its inventory to customers. It reported shipping costs rose 42% to $3.28 billion.