Ama­zon has an­other ‘Prime’ hol­i­day: Profit tops $3 bil­lion

Sun.Star Pampanga - - PERSPECTIVE! -

NEW YORK (AP) — Ama­zon had an­other strong hol­i­day sea­son: Its quar­terly profit topped $3 bil­lion for the first time as rev­enue grew across many of its busi­nesses, in­clud­ing on­line shop­ping, ad­ver­tis­ing and cloud com­put­ing.

The com­pany, how­ever, is­sued an es­ti­mate for the cur­rent quar­ter’s rev­enue that was be­low what Wall Street an­a­lysts ex­pected, send­ing its stock down about 5 per­cent in af­ter-hours trad­ing Thurs­day.

Ama­zon ex­ec­u­tives at­trib­uted the soft­ness in this quar­ter to un­cer­tainty about how new e-com­merce rules in In­dia could hurt sales in that coun­try. They also said the com­pany’s costs may in­crease this year from last year, as it spends on hir­ing, ware­house con­struc­tion and other in­vest­ments.

Ama­zon, which re­cently sur­passed Mi­crosoft as the most valu­able com­pany in the U.S., re­ported net in­come of $3.03 bil­lion dur­ing the last three months of 2018. On a per share ba­sis, it had earn­ings of $6.04, beat­ing the $5.55 per share an­a­lysts ex­pected, ac­cord­ing to Zacks In­vest­ment Re­search.

Rev­enue rose 20 per­cent to $72.38 bil­lion, which also beat ex­pec­ta­tions.

The Seat­tle-based com­pany has boosted its prof­its in re­cent quar­ters as it ex­panded into busi­nesses be­yond on­line shop­ping. Its Ama­zon Web Ser­vices unit, which pro­vides cloud com­put­ing ser­vices to gov­ern­ments and com­pa­nies, has be­come a big mon­ey­maker, help­ing to off­set the high costs of the re­tail busi­ness. Sales in the web ser­vices unit grew 45 per­cent in the quar­ter.

Its ad­ver­tis­ing divi­sion is now a multi­bil­lion dol­lar busi­ness, sell­ing ads to com­pa­nies that want their prod­ucts to show up first when shop­pers search for things on the site. The com­pany doesn’t say ex­actly how much its ad busi­ness makes, but its “other” rev­enue, which is mostly made up of the ad busi­ness, nearly dou­bled from a year ago.

Dur­ing the hol­i­days, Ama­zon said a record num­ber of peo­ple signed up for its Prime mem­ber­ship, but it didn’t pro­vide spe­cific num­bers. Prime mem­bers pay $119 a year for free, fast ship­ping and other perks. The ser­vice is a way for the com­pany to strengthen loy­alty with shop­pers.

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