Amazon's quarterly profit tops $2 billion for first time

George McgeeJul 31, 2018

Amazon hits record-breaking profits after push by ad and cloud businesses. As a result, the company has an EPS growth of 59.66% for the approaching year.

Sales rose by 39% to $52.89bn, slightly less than analysts had been forecasting. But it's not the same story for Amazon.

The company posted net income of $2.53 billion in the second quarter - a quarterly record for the company, and a almost 13-fold increase from net income of $197 million in the year-earlier period. But as online sales grew, so did shipping costs: Amazon spent almost $6 billion mailing out packages in the second quarter, a 31 percent increase from a year ago.

According to the research firm eMarketer, Amazon's e-commerce revenue will grow more than 28% this year to reach $394 billion, and will account for 49% of United States online retail sales and almost 5% of all retail spending. In 2014, Amazon lost $131 million.

Those changes let Amazon staff up growing departments without hiring lots of new people since it can transfer existing workers from other functions where they're no longer needed.

Amazon's size certainly helps these days.

It was expected the company would report net income of around 1.2 billion dollars.

That all means investors no longer shudder when sales growth falters.

The social networking firm, which reported quarterly earnings after the market close on Wednesday, slumped by 19 percent Thursday.

Amazon's shares were up more than 3% in after hours trading. Total volume is the number of shares or deals that point towards the overall activity of a security or market for a given period.

RJ Hottovy, an equity analyst at Morningstar Inc., said Amazon profit also got a boost from more sales by independent merchants on its site, where the company gets commissions without the cost of buying inventory. "We think it's driven by the Prime program, as well as increased selection, particularly third-party selection".

Amazon's stock has more than tripled in the past three years, making Bezos the richest person on the planet. I would say that in addition to the operating efficiencies, advertising is also starting to make an impact on gross profit, although advertising is smaller in the worldwide segment than it's in North America, it's growing at a same rapid clip year-over-year.

Amazon also announced last month that it is buying the online pharmacy PillPack, pushing it deeper into the health care industry. Taylor Hoffman Wealth Management acquired a new position in Amazon.com during the 4th quarter valued at $108,000.

Technical indicators do not lead us to assume the stock will see more gains anytime soon. President Trump has been a vocal critic of the company - and its founder's ownership of The Washington Post.

Amazon Web Services (AWS), which handles data and computing for large enterprises in the cloud, remained the cash cow for the Seattle-based company and generated about 55 percent of the its total operating income.

Amazon had a spectacular second quarter by all measures.

Amazon reported higher than analysts' expectations results for its second-quarter earnings on Thursday afternoon. (NASDAQ:AMZN) were released by: Nasdaq.com and their article: "Is Amazon (AMZN) Outperforming Other Retail-Wholesale Stocks This Year?" published on July 24, 2018 as well as Thestreet.com's news article titled: "6 Reasons Amazon Is an Investor's Dream" with publication date: July 24, 2018. Members spend more than non-members.

Additionally, Prime members shopped Prime Day deals at Whole Foods Market for the first time. Mark Sheptoff Financial Planning LLC lifted its stake in Amazon.com by 60.2% during the first quarter.

Amazon will capture almost half of all online spending in the US this year, according to EMarketer Inc.

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