Microsoft may have topped the $US1 trillion valuation level for a second day on Thursday on Wall Street but the real tech star – in fact the real US corporate star was Amazon which blew past all profit forecasts in an ominous sign for its online rivals.
Amazon in fact doubled its profit in the first three months of 2019, but the shares rose less than 1% higher in after hours trading
Amazon reported first-quarter profit of $US3.6 billion, or $US7.09 a share, on sales of $US59.7 billion, up from earnings of $US3.27 a share a year ago on revenue of $US51 billion.
That was a record quarterly net income and Amazon has now produced record revenue figures in the last four consecutive quarters, as well as earning around $US12 billion in that time, according to Marketwatch.com..
US analysts had forecast Amazon would report earnings of $US4.70 a share on sales of $US59.68 billion, according to financial data group FactSet, so it is clear the online giant’s profit margins improved sharply in the quarter (which is normally a weak three months coming after the end of year sales splurge on Black Friday, Cyber Monday and Christmas).
Amazon had forecast revenue of $US56 billion to $US60 billion for the quarter, which disappointed the market at the time. The company produced another forecast for the current quarter for revenue between $US59.5 billion to $US63.5 billion ($US52.89 billion in the second quarter of 2018).
US analysts on average were projecting revenue of $US62.39 billion. So there was the usual downbeat commentaries from analysts who refuse to understand Amazon’s businesses.
Amazon’s core e-commerce business produced most of the revenue, reporting North American revenue of $US35.81 billion and $US16.19 billion internationally, with domestic operating income of $US2.29 billion and an international operating loss of $US90 million.
Amazon Web Services, the company’s cloud-computing arm, reported operating income of $US2.22 billion on a 41% jump in revenue of $US7.7 billion, up from income of $US1.4 billion on sales of $US5.44 billion a year ago.
Revenue from Amazon’s seller services jumped 20% to $US11.1 billion in the first quarter, while ad and other sales surged 34% to $US2.7 billion (Mostly ads) as it looms into sight as the third biggest online ad group behind Google and Facebook.
