Amazon primed for even more growth

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Amazon primed for even more growth

By Gina Acosta - 07/26/2018
Amazon.com Inc. reported a 39 percent jump in second-quarter revenue to $52.9 billion driven by a surge in online shopping and higher demand for its cloud services, the company said.

Amazon continues to be a primary beneficiary of the strong economy, with a second quarter earnings report showing accelerated top line growth and record profits.

Amazon.com Inc. reported a 39 percent jump in second-quarter revenue to $52.9 billion driven by a surge in online shopping and higher demand for its cloud services, the company said. That revenue number missed analyst consensus estimates of $53.4 billion, but the company reported adjusted earnings of 5.07 per share, more than double consensus analyst estimates for $2.50. Excluding the $760 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 37% compared with second quarter 2017.

Net income at Amazon rose to $2.53 billion, a record, in the second quarter ended June 30 from $197 million, or 40 cents per share, a year earlier.

Revenue from Amazon Web Services, the company’s fast-growing cloud services business, surged about 49 percent to $6.11 billion.

Amazon continues to invest heavily in a multitude of sectors, emphasizing growth and expansion especially when it comes to its voice shopping devices. 

“We want customers to be able to use Alexa wherever they are,” said Jeff Bezos, Amazon founder and CEO. “There are now tens of thousands of developers across more than 150 countries building new devices using the Alexa Voice Service, and the number of Alexa-enabled devices has more than tripled in the past year. Our partners are creating a wide variety of new Alexa-enabled devices and experiences, including soundbars from Polk and Sonos; headphones from Jabra; smart home devices from ecobee and First Alert; Windows 10 PCs from Acer, HP, and Lenovo; and cars from automakers including BMW, Ford, and Toyota.”

The Alexa Skills store now offers more than 45,000 skills created by third-party developers. Additionally, customers can now use Alexa to control more than 13,000 smart home devices from over 2,500 unique brands.

Amazon has launched Alexa for Hospitality, which brings the convenience of Alexa to hotels, vacation rentals, and other hospitality locations. Offered by invitation, Alexa for Hospitality lets hoteliers create new voice-first experiences so guests can ask Alexa for hotel information, play music in their room, request guest services, and more.

Alexa is available on even more products via the Alexa Voice Service, including soundbars from Polk and Sonos; headphones from Jabra; smart home devices from ecobee and First Alert; Windows 10 PCs from Acer, HP, and Lenovo; and select vehicles from BMW, Ford, and Toyota.

Amazon just wrapped up its fourth ever Prime Day event, which did not go as smoothly as in years past. Technical glitches for hours kept consumers from being able to shop.

Still, Amazon increasing the Prime membership price earlier this year by nearly 20% in January should be a solid profit generator. Amazon announced in April that it has surpassed 100 million Prime members worldwide. Prime is thought to be at around 55 million households in the U.S.

According to the company, Prime Day 2018 was Amazon’s biggest global shopping event ever, welcoming more new Prime members on July 16 than any other previous day in Amazon history.

Additionally, Prime members shopped Prime Day deals at Whole Foods Market for the first time. Amazon launched Prime member savings at Whole Foods Market stores nationwide, offering Prime members 10% off hundreds of sale items and discounts on popular products.

Amazon continues to expand grocery delivery from Whole Foods Market to more than 20 cities in the U.S., offering customers fast delivery on natural and organic products through Prime Now.

Amazon may be focused on voice shopping, its cloud services division and other growth areas, but apparel is another big opportunity area for the company.

Amazon Fashion launched Prime Wardrobe in the U.S. earlier this year, allowing Prime members to try clothing, shoes, and accessories before they buy. Customers can choose from eligible styles, have up to seven days to try them on at home, and are charged only for those items they decide to keep.

For the third quarter, Amazon expects net sales between $54 billion and $57.5 billion, or to grow between 23% and 31% compared with third quarter 2017. 

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