Amazon profit tops $2 billion for first time

Amazon profit tops $2 billion for first time

Amazon profit tops $2 billion for first time

The company during the most recent three quarters pulled in $6 billion in net income, a sum almost equal to its $6.1 billion profit during the prior 21 years.

The results, announced after markets closed on Thursday, marked the first time Amazon's quarterly profit has broken the $2bn barrier.

Amazon sales came in shy of analyst expectations at $52.89 billion for the second quarter of 2018, but the ecommerce giant delivered a whopping beat on earnings per share.

On a conference call with investors, Brian Olsavsky, the company's chief financial officer, attributed the quarter's success to accelerating growth in Amazon's "most profitable areas", particularly the cloud-computing division, Amazon Web Services (AWS).

It marked the third consecutive quarter that Amazon has topped $1 billion in profit, a remarkable feat for a company once known for investing so much in its business that it often lost money.

Amazon has forecast operating income above Wall Street's expectations for the third quarter, as the company earned far more from its higher-margin cloud business. It's still a healthy jump from its revenue the previous year, which was $37.96 billion. The company's brick-and-mortar stores generated $4.31 billion in second-quarter revenue.

Amazon's report shows how the world's largest online retailer has increasingly learned to compensate for the high costs of fast package delivery and video streaming by controlling expenses and building up higher-profit businesses. Amazon noted that, over the last three months, the cloud service has added an Elastic Container service for Kubernetes, the availability of its DeepLens camera line for machine learning, and the launch of both the Neptune graph database service and the Snowball Edge Computing appliance.

Sales from other businesses - mostly advertising - surged 129 per cent to US$2.2 billion, just below the growth rate from the first quarter.

Amazon's fifth anniversary in June saw founder and world's richest man Jeff Bezos offer cashbacks to Indian customers, as the company also looks to push its payments business.

Amazon's spending typically climbs in the July through September quarter, pressuring profits as the company prepares for Christmas and the winter holidays, its peak sales period for the year.

Though Amazon's financial results and forecasts are decidedly more optimistic than Facebook's were, the company has not entirely evaded the increased political scrutiny now facing the US's major technology companies.

Amazon's momentum has been strong enough to sustain Twitter broadsides from U.S. President Donald Trump, who has accused Amazon of freeloading off the U.S. Postal Service and using the Washington Post as a lobbying tool against antitrust criticism.

Coming off a "very high investment period" a year ago, Amazon was "looking at our fixed headcount, and how can we move people to our new investment areas", he said.

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

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