Published: Mon, July 30, 2018
Markets | By Erika Turner

Amazon Delivers Record Quarterly Profit

Amazon Delivers Record Quarterly Profit

Shares rose more than three per cent in after-hours trade. With a market value of $916.97 billion, Amazon is racing with Apple Inc and Alphabet Inc to be the world's first trillion-dollar public company.

Amazon's (AMZN) profits jumped in the second quarter despite sales falling short of Wall Street forecasts, topping $2 billion for the first time.

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. (NASDAQ:AMZN) news were published by: "Nasdaq.com which released: "Don't Consider Price When Looking to Buy Cheap Stocks" on July 25, 2018, also Bizjournals.com with their article: "Amazon soon will deliver its Lake Nona fulfillment center â€" the area's largest industrial project" published on July 23, 2018, Seekingalpha.com published: "Microsoft Soaring To All-Time Highs" on July 26, 2018.

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

But Amazon's eye-popping growth has also led to increased scrutiny over the possibility that the company's market dominance gives it monopoly power.

"We want customers to be able to use Alexa wherever they are", he said in a statement.

"Our partners are creating a wide variety of new Alexa-enabled devices and experiences, including soundbars from Polk and Sonos, headphones from Jabra, smart home devices from ecobee and First Alert, Windows 10 PCs from Acer, HP, and Lenovo, and cars from automakers including BMW, Ford, and Toyota", Bezos said.

Elsewhere in the results, Amazon's cloud computing platform Amazon Web Services (AWS) also reported growth on the same period past year as it remains a crucial part of the firm's business. The company said revenue from the category and some other items grew 132 percent to $2.2 billion. Sales from Whole Foods, which was acquired a year ago, was roughly $4.3 billion during the quarter.

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The profit expansion is largely driven by the growth of Amazon's high-margin businesses, like cloud and advertising.

Brian Olsavsky, Amazon's chief financial officer, expanded on the company's advertising fortunes during a conference call with analysts. "We've seen a greater-than-expected efficiency in a lot of our spend in things like warehouses, data centres, marketing".

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. Prime Day sales are not included in Q2 earnings.

"Advertising is starting to make an impact on our gross profit", he said.

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.

At the firm's lucrative cloud services division, Amazon Web Services, sales were up almost 50% year-on-year to $6.1bn.

Despite the phenomenal numbers for AWS, CEO Jeff Bezos chose to use the quarterly report to talk up another Amazon product: the Alexa virtual assistant and its ongoing efforts to expand both its range of devices and its geographic availability. Trading volume can assist a shareholder to identify momentum in stock and confirm a trend.

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