Profits reign in for third straight quarter for Amazon

By : |July 29, 2016 0

Amazon has come a long way from its ill-reputed tag of being a money-loser and has delivered a stellar performance for the third straight quarter.

Amazon reported excellent quarter earnings with $30.4 billion revenues and $1.78 EPS, against analysts’expectations of $29.55 billion revenues and $1.11 EPS. Moreover, Amazon earned $857 million in net profits and generated $1.3 billion in operating income. This means Amazon made a huge jump from $92 million profit and $464 million operating income last year.

Amazon also saw an increase of 42 percent in operating cash flow, a crucial indicator of company’s financial health. The cash flow rose from $9.0 billion last year to $12.7 billion. Amazon stocks have been up by 43 percent compared to last year. Since February, there is an increase of 50 percent in its stock value and the company currently has a market cap of $355 billion.

Largely known for its e-commerce business, Amazon has also made its mark in the cloud business with Amazon Web Services (AWS). AWS, making significant revenues for the company, jumped from $1.8 billion during the same period last year to $2.9 billion this year.

Most importantly, Amazon highlighted India as the key area of growth in its earnings report. CEO Jeff Bezos said, “The team in India is investing at a torrid pace, and we’re very grateful to our Indian customers for their welcoming response.”

No wonder Amazon is rapidly expanding its business in India from e-commerce to other verticals. After creating a cut into Indian e-commerce, Amazon launched a new AWS Region in the country and has also committed a massive investment of $5 billion into the country. More recently, it came up with its Prime service in the country with unlimited free shipping.

Though it didn’t create any major issue for Amazon, the company failed to meet certain expectations. Amazon witnessed a small traction this quarter with its personal voice assistant device Alexa and also did not find success with its Fire phone. It also had to shut down its flash sales division MyHabit.

Amazon also highlighted other key areas of growth in its earnings report which includes Prime business, Fire TV media player, the latest Kindle e-book reader, and Amazon Dash buttons.

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