According to a recent press release, Amazon’s second quarter earnings were released Thursday. It was found that they failed to meet the profit expectations but have exceeded the forecasted revenue.
The data shows that Amazon’s investments have paid off by accelerating the sales growth but at reduced profit margins. Also, Amazon’s shares saw a drop of 2% during the trade in after hours.
The revenue saw an exponential growth of 20% as compared to the last year. This was a rebound from the first quarter (16.8%) which was the slowest growth in the last 4 years. This recovery will be followed with Amazon’s decision of spending $800 million in improving delivery services and warehousing to facilitate 1 day delivery for majority of products for their prime members.
It is evident that this investment is eating up their total profit. The net income of Amazon ($2.6 billion) was at the lowest since last year’s 2nd quarter. According to Charlie O’Shea, Moody’s Amazon analyst, second quarter results had a negative impact due to North America’s margin compression for investing in next day delivery in North American regions and he believes that it is a pain for a short term to enjoy long term gains.
Jeff Bezos, the CEO of Amazon stated that this change has resulted in accelerated sales and has given a lot of positive feedbacks. He also added that there are over 10 million products that are available for free 1 day delivery to the Prime members and that is just a start.
AWS or Amazon web services that provides data storage and computing to businesses, schools, government agencies etc. reported a growth of 37%.
Amazon ad services saw a rise of 37% to a massive 3 billion dollars. There was also a rise in International sales which rose from 12% to $16.4 billion.
Bachelor’s degree in Astrophysics has helped develop an interest in knowing more about the space and Universe concepts. The keenness in gathering more information about the outside world has helped Carl enhance his skill of writing. He immediately chose the field of content writing as a career so as to provide the public with all the astronomical knowledge gained during the years of experience. The content writing has now become an integral part of Carl’s life and thus, he has been able to dedicate 4 Years of his life to Industry News Reports portal as a Senior Content Writer.