Amazon.com has reported a record profit for the fourth time in a row. The online retailer reported a net profit of $ 3.6 billion in its quarterly report presented after the close of trading on Thursday, more than twice as many as last year. Earnings per share of $ 7.09 were well above the expected $ 4.72. However, revenue growth slowed somewhat, this time standing at 17 percent, and revenue of $ 59.7 billion met almost exactly analyst expectations. Amazon's share price was little changed in after-hours trading. The Amazon share has gained nearly 30 percent in value since the beginning of the year.
The rapid increase in profits was a temporary all-clear, because Amazon had announced three months ago, this year, to increase its investments significantly, possibly at the expense of profitability. This was a reminder of the days when Amazon was chronically low-income due to its high investment. However, the company benefits from having built up a number of profitable other businesses in addition to its traditional and usually low-margin online commerce in recent years.
The young business with advertising
First and foremost is Amazon Web Services (AWS), the division offering "Cloud Computing" services. Here, first-quarter revenue increased 41 percent to $ 7.7 billion, and operating income climbed 59 percent to $ 2.2 billion. AWS thus accounted for around half of the Group's operating result. Unlike its core business, Amazon serves corporate customers here. AWS provides computer resources to companies wishing to migrate their information technology to the Internet and offers a range of related services. The division competes with the Azure, the cloud platform of the software company Microsoft. Similar to AWS for Amazon, Azure has become one of Microsoft's flagship businesses.
Very profitable for Amazon is also quite young advertising business. In the "Other Activities" division, which consists primarily of advertising, sales increased 34 percent to $ 2.7 billion. However, this is not only good news, because compared to the final quarter of 2018, this meant a decline in sales. The profits in the division does not quantify Amazon.
Also quite new for Amazon is the offline trade. Two years ago, the company bought the Whole Foods supermarket chain, and also built a chain of bookstores and opened a dozen or so grocery stores. However, in the physical stores division, sales increased only one percent to $ 4.3 billion in the last quarter.
For the second quarter, Amazon predicted sales between $ 59.5 billion and $ 63.5 billion. That would correspond to a growth of 13 to 20 percent.
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