Amazon sees sales jump by almost a third
- Author: Wendy Palmer Jul 29, 2016,
Jul 29, 2016, 1:17
If you have been following the company, you would know that Amazon just had its second annual Prime Day, on which Prime members shopped tens of thousands of deals across almost every category on Amazon.
This represented the fifth-straight quarter of profits for Amazon, which operated at a loss or almost even for years as it build up what is now a formidable e-commerce business.
Additionally, the cloud service arm, Amazon Web Service (AWS), continues to post high growth numbers. Analysts polled by Thomson Reuters anticipated earnings of $1.11 per share on revenue of $29.55 billion.
Shares of Amazon are climbing by 1.88% to $766.75 in after-hours trading today.
Inc. projected revenue for the third quarter that may beat analysts' estimates, after a second Prime Day event led to record device sales and an expansion in India is paying off.
David Ryder Getty Images
The Seattle tech behemoth said Thursday that it had a profit of $857 million, or $1.78 per share for the quarter ending in June, up from 19 cents in the same quarter past year. But the 60 percent year-over-year growth in Prime Day sales won't factor into the company's bottom line until it reports third quarter because it fell in July.
What Amazon calls "service sales", which includes the commission Amazon takes from sellers on its marketplaces and other items, increased 52.7% year over year to $9.288 billion from $6.081 billion.
But analysts at Consumer Intelligence Research Partners estimated Amazon Prime now has 63 million U.S. members, spending on average about US$1,200 per year, compared to about US$500 per year for non-members. Despite accounting for just 9.5 percent of overall sales last quarter, the cloud leader generated $718 million in operating income - almost 56 percent of the entire company's operating income.
Amazon Web Services (AWS), which power much of the Internet, continued to be a bright spot for the company.
Driven by the larger role of AWS, operating margins rose again, more than doubling from 2 percent a year ago to 4.2 percent in the most recent quarter.