Amazing Amazon delivers record profits as the likes of Twitter and Facebook falter: Google going good
Amazon has reported record quarterly profits helped by a rise in online sales and demand for its cloud services. 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 last year. Sales rose by 39% to $52.89bn, slightly less than analysts had been forecasting.
“It was a strong quarter,” said chief financial officer Brian Olsavsky. “What I attribute it to is continued strength in some of our most profitable areas.” At the firm’s lucrative cloud services division, Amazon Web Services, sales were up nearly 50% year-on-year to $6.1bn. Amazon is also starting to attract more money from advertising.
Revenue from the firm’s “other” category, which includes advertising, more than doubled to about $2.2bn. Retail sales in North America were healthy as well, rising about 44% to almost $32.2bn.
Recruitment slowed in the quarter. Amazon is also starting to reap the benefits of previous infrastructure investments, allowing for less rapid spending growth, Mr Olsavsky said.
Daniel Ives, chief strategy officer at GBH Insights, said Amazon’s profitability appears to be accelerating faster than expected.
That, he wrote, will be “music to ears of investors” who have stood by Amazon and its famously long-term approach to deferring profit in favour of reinvesting in the company.
Amazon is expected to account for roughly half of online sales in the US this year, according to research firm eMarketer. The company told investors that it expects third quarter sales in the range of $54bn- $57.5bn, growth of 23% to 31%.
The big tech stocks have been in the spotlight recently. While Amazon reported record results in the second quarter, Facebook warned of slowing revenue growth, which led to a record near-20% fall in its share price. Twitter reported record profits but fewer users. Google’s parent company, Alphabet, reported stronger-than-expected advertising sales.