Economy

Amazon earnings top forecasts on cloud computing, ad growth

Amazon earnings top forecasts on cloud computing, ad growth

Amazon's stock spiked about four per cent to US$1,870 per share in after-hours trading following the news.

Amazon threatens to match, or even eclipse, Apple's market value, which would make it the world's most valuable company.

Inc. reported a 39 percent jump in second-quarter revenue to $52.9 billion driven by a surge in online shopping and higher demand for its cloud services, the company said.

Popular brands now agree to put their inventory on sale for members of Amazon's loyalty club Prime, while rival retailers scramble to drive traffic back to their websites.

Amazon's cloud business may get much of the attention for bolstering the company's bottom line. Analysts were expecting revenue of $53.41 billion. (NASDAQ:AMZN) was sold by Blackburn Jeffrey M. Reynolds Shelley also sold $795,502 worth of Amazon.com, Inc.

Amazon, which for most of its lifetime relied on its core online retail business, and tended to post losses or only slim profit, has impressed investors in recent quarters with the strength of earnings generated by other units. Sales from Whole Foods, which was acquired a year ago, was roughly $4.3 billion during the quarter.

Again, it was Amazon's cloud computing arm and advertising business that helped it to yet another strong quarter. Chief Financial Officer Brian Olsavsky said 2017 investments in warehouse and data-center efficiency are lifting profit this year.

Profits hit a record $2.53bn (£1.9bn) in the three months to the end of June - about 12 times more than it made during the same period past year.

Amazon handily topped a consensus analyst estimate of $2.49 per diluted share published by MarketBeat, although revenues came in a little shy of expectations.

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It should be noted that Amazon has a bit of advantage in the advertising space, as adverts reportedly tend to result directly in sales, as they target customers on Amazon who are already intending to shop, unlike adverts on say Facebook and Google.

The firm said it would raise the price of Prime memberships in the USA by $20, but that doesn't seem to have deterred consumers.

The earnings report shows that Amazon has increasingly learned to compensate for the high costs of fast shipping by controlling expenses and generating revenue in more areas.

In prepared remarks about the quarter, founder and CEO Jeff Bezos focused on Alexa, the company's voice-powered service.

The stock increased 0.51% or $9.27 during the last trading session, reaching $1817.27.

The top-selling item in the U.S. was the Instant Pot, while the Bosch cordless drill took the title in the UK.

Shoppers purchaed more than five million toys, beauty products, PCs, apparel items and kitchen products.

"Despite its enormous size and previous run of strong growth, Amazon has had no problem in delivering another good set of numbers", said Neil Saunders of the research firm GlobalData. Those efforts include snagging more well-known brands to selling their wares on Amazon.com, a steady increase in private label fashion products available in the US, and the nationwide rollout of Amazon Wardrobe, a service that allows Prime members to choose up to 8 items for users to try on at home for 7 days until Amazon charges the user.


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