Amazon Profit Tops Analysts' Estimates on Cloud, Advertising

Posted July 28, 2018

Its profit increased to $2.5 billion in the second quarter, or $5.07 per diluted share, compared with net income of $197 million in second quarter 2017.

Now, Olsavsky said, the company will "reset and evaluate where we still need to add people", he said. The company said subscription revenue increased 57 percent to US$3.4 billion. Amazon, however, was the exception.

Amazon.com on Thursday reported a second-quarter profit of US$2.5 billion, more than double the forecasts of analysts, on strong cloud computing and advertising operations.

Following the disappointment Wednesday in Facebook's stalling growth in users and engagement in key markets, which led to a almost 20% drop in its stock price and over $100 billion in market cap, Amazon regained a small drop during trading hours to return to its previous day's close in after-hours markets.

Amazon's shares were up more than 3% in after hours trading.

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While top tech rival Facebook faces the aftermath of the biggest loss in Wall Street history, shares of Amazon marched higher Thursday after it bested analysts' expectations.

Amazon has reported record quarterly profits helped by a rise in online sales and demand for its cloud services. The company saw strong growth - particularly on the bottom line - in all its business segments.

The Amazon Web Services division continued its blazing growth trajectory, with $6.1 billion in sales (up 49%) and operating income of $1.64 billion (up 79%) for the second quarter. Its North American retail business specifically fared well.

Yet the company said it expects an operating profit between $1.4 billion and $2.4 billion, up from $347 million a year earlier.

Amazon's worldwide losses for the quarter ending June were $494 million, a fall of 31% from $724 million in the corresponding quarter of past year.

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Hiking the annual US price of Prime 20 percent during the second quarter showed few signs of discouraging sign-ups: the company said subscription revenue increased 57 percent to $3.4 billion. It posted an operating profit of $1.64 billion, up from $916 million a year ago.

Highly profitable ad sales were another bright spot in the three months to June.

The Seattle-based company cut hundreds of consumer jobs in its headquarters earlier this year, in a move that may have lowered costs and freed up resources for fast-growing areas like Amazon's voice aide Alexa.

Recruitment slowed in the quarter.

Amazon continued to improve its global performance, which largely comprises India, in the June quarter, after reversing the trend of ballooning losses in the first quarter.

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Saunders said in a research note that Amazon's success comes from the fact that "it innovates and tries new things like no other retailer. this heady pace of creativity is the key reason why it stays several steps ahead of the market and is able to generate so much growth".