Daily Management Review

Amazon added 41% to the net profit in Q1


04/28/2017


The world's largest Internet retailer Amazon.com Inc. increased its net profit in the first quarter of 2017 by 41%, thus exceeding the market expectations. Amazon’s shares grew by 4.1% to $ 956.9 per share against the publication of the report. At the close of trading, the share price was $ 918.3.



Mike Mozart via flickr
Mike Mozart via flickr
Net profit in January-March rose to $ 724 million, or $ 1.48 per share, compared to $ 513 million, or $ 1.07 per share, for the same period a year earlier. Sales increased by 15.3% to $ 23.734 billion.

Analysts polled by Thomson Reuters predicted a profit at $ 1.12 per share without taking into account one-off factors. 

Revenue rose 22.6% to $ 35.7 billion from $ 29.1 billion in the first quarter of 2016. Amazon itself expected revenues of $ 33.25 billion to $ 35.75 billion, Wall Street's consensus forecast was $ 35, 3 billion.

The growth of profits in the first quarter was supported by high performance of the company’s cloud division, Amazon Web Services (AWS). Its revenue increased by 42.6% compared to the same period in 2016 to $ 3.66 billion.

Amazon has recently been trying to control costs, but now the company is waiting for a new phase of increased investment. This time, Amazon wants to consolidate its overseas markets, including India and Mexico, to develop its own delivery service and expand video content. Analysts expect that this period will last at least until mid-2018. Amazon already promised to create about 130 thousand jobs in the US during this time. 

Last quarter, Amazon's international business was unprofitable, and the I quarter was no exception: the operating loss outside the US was $ 481 million, although revenue rose 15.6% to $ 11.06 billion.

In the first quarter, Amazon announced construction of its own air transportation center in Kentucky and expansion of cargo air transportation opportunities in China. The company leased 40 aircraft, its fleet of trucks with a trailer now exceeds 4 thousand. Amazon promises the delivery of purchased goods within an hour already in 40-odd cities. Apparently, this promise led to an increase in the company's transportation costs in the I quarter by 34% to $ 4.38 billion.

According to Amazon’s forecast, the company's revenue in the current quarter will range from $ 35.25 to 37.75 billion. Operating profit is expected between $ 425 million and $ 1.08 billion.

The consensus forecast of experts for revenue in the I quarter is $ 36.87 billion.

Shares of Amazon grew by 4.1% to $ 956.9 per share against the report’s publication. At the close of trading, the share price was $ 918.3. Over the past three months, the company's capitalization has grown by about 10%, over the past year - by 52%. The increase in the US stock index Standard & Poor's 500 for these periods was 9% and 20%, respectively.

Meanwhile, capital of Jeff Bezos, Founder, Chairman of the board and the main owner of the Internet giant Amazon, amounted to $ 79 bln at the close of trading of the company's shares on Thursday. However, after Amazon released its financial results for the first quarter, the quotes once again jumped at the off-exchange auctions after the end of the main session. As a result, Bezos's fortune increased by another $ 3.3 billion, exceeding $ 80 billion for the first time, according to the billionaire index compiled by Bloomberg.

Capital of Microsoft's co-founder Bill Gates was $ 87.1 billion on Thursday; thus, Bezos still lags behind him. Gates has been topping the list of the world’s richest people for many years (with the last period since May 2013).

Capital of the 53-year-old Bezos has grown by $ 65.2 billion since Bloomberg began to calculate the billionaires index daily in March 2012. Amazon has shown double-digit revenue growth rates in each quarter for 20 years. Bezos also owns newspaper The Washington Post, bought in 2013, and aerospace company Blue Origin (both companies are non-public). In early April, Bezos first told that he was selling Amazon shares for about $ 1 billion a year and investing in Blue Origin. 

source: reuters.com






Science & Technology

Germany Introduces The First Ever Train To Run On 100% Hydrogen

Germany Plans On Cyber Security Research To End Reliance On U.S. Tech

Fuchsia will kill Android by 2023: Top 5 facts about the new OS

New Study Finds Goats Interact More With Happy People

More than 32 thousand "smart" houses under threat of hacker attack

Internet addiction and children: Global plague

Apple takes up to develop Apple Watch for health monitoring

Hyperloop is growing in Europe

Analysts: US gamers prefer mobile games

Google Assistant Winner Of Head-To-Head Test Of Digital Assistants, Beats Siri And Alexa

World Politics

World & Politics

Ex-Brexit Minister Said A ‘Reset’ Is Needed For Brexit Talks

10 countries with the best healthcare systems

Foreign Experts To Be Allowed By North Korea For Permanent Destruction Of Missile Sites

Ireland recovers €14.3 billion from Apple

Is China going to cancel its birth limit policy?

The US is ready to start negotiations with China

US and China start 5G race

Is Czech Republic posing a threat to the European Union?