Daily Management Review

Amazon reports a surge in profit


Internet company Amazon announced more than twofold increase in profits in the first quarter. Such indicators have surprised many analysts, who expected a reduction in profits due to the company's significant expenses on new projects. However, Amazon's cloud business and Internet advertising more than compensated for all expenses.

Mike Mozart via flickr
Mike Mozart via flickr
Yesterday late in the evening, the Amazon Internet corporation reported that in the first quarter its net profit increased by 120% compared to the first quarter of last year, from $ 724 million to $ 1.6 billion. Revenue growth was more modest, 10% from $ 19, 9 billion to $ 21.8 billion. Sales rose 43%, to $ 51 billion. Analysts had expected a decline in net profit due to the fact that the company is actively investing in purchase and construction of new order processing centers, as well as in creating its own software. That's why when Amazon presented its results, investors were pleasantly surprised, and quotes of the company jumped by more than 7%.

The company attributed its success to the good results of Amazon Web Services (AWS), a system of cloud services platforms that allows storing, distributing and processing data, provides hosting services, rent virtual servers, and so on.

"For the last seven years, AWS has been able to create a good reserve before many competitors came to this market, so our team was able to develop without slowing down," said Jeff Bezos, the founder and head of Amazon. "As a result, the services provided by AWS are the most developed and functional. This system allows developers to do more and work faster, we continue to improve this service every day. That's why you can see such a significant increase in AWS - now for two consecutive quarters. I would like to thank all AWS customers and assure that we will work hard for you." Currently, the annual turnover of the Amazon Web Services platform is about $ 20 billion.

Amazon's operations related to online advertising also showed significant growth. Quarterly revenue of these operations increased by 139% - to $ 2.03 billion, for the first time in the history of the company breaking the $ 2 billion mark. "Now this is our billion-dollar business, which is also growing rapidly," said the CFO at a conference call for media and analysts Brian Olsavsky.

source: bloomberg.com

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