Tags: Jeff Bezos | Amazon | earnings | retail

Amazon's Double-Digit Sales Growth Extends to 20th Year

Amazon's Double-Digit Sales Growth Extends to 20th Year

Thursday, 27 April 2017 05:23 PM

Amazon.com Inc.’s unbroken 20-year streak of double-digit revenue growth shows no sign of slowing this year, helped by an influx of online shoppers who are abandoning stores and new business for its cloud-computing division.

The company projected sales that may beat estimates in the current quarter, reinforcing its message to investors that big spending on warehouses that hold inventory, movies that engage customers and devices that dazzle are all part of a winning formula.

First-quarter sales increased 23 percent to $35.7 billion. Net income was $724 million, or $1.48 a share, the company said in a statement. Analysts estimated profit of $1.08 a share on revenue of $35.3 billion, according to data compiled by Bloomberg.

"Amazon appears to be firing on all cylinders," said Colin Sebastian, analyst at Robert W. Baird & Co. "The core e-commerce segment growth remains very healthy, Amazon Web Services was fairly stable even with the recent price reductions, and growth in subscription services and advertising is robust, starting to move the needle, and helping to augment profitability."

Shares gained as much as 5 percent in extended trading after closing at a record $918.76 in New York. The stock has jumped 23 percent this year.

The world’s largest online retailer is dominating e-commerce in the U.S. with its $99-a-year Amazon Prime subscription, which includes delivery discounts, music and video streaming and photo storage that keep shoppers engaged with the website. Seattle-based Amazon had 80 million Prime subscribers in the U.S. as of March 31, an increase of 36 percent from a year earlier, according to Consumer Intelligence Research Partners.

Amazon Web Services, its cloud-computing division, subsidizes the company’s spending for various initiatives such as expanding into India and Australia, speeding up delivery times to as little as an hour on select products, adding new skills and devices for its voice-activated Alexa platform and producing original movies and shows. Operating expenses rose 24 percent to $34.7 billion in the quarter.

Prime memberships help lock in loyalty, which is critical as competitors such as Wal-Mart Stores Inc. enhance their e-commerce offerings to slow Amazon’s momentum.

Amazon on Thursday forecast operating income in the current quarter of $425 million to $1.08 billion on net sales of $35.3 billion to $37.8 billion. That compares with operating income of $1.29 billion on sales of $30.4 billion in the same period a year ago. Analysts projected sales of $36.9 billion in the current quarter.

Amazon Web Services revenue gained 43 percent to $3.66 billion. That’s slower than 47 percent year-over-year growth in the previous quarter.

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Amazon.com Inc.'s unbroken 20-year streak of double-digit revenue growth shows no sign of slowing this year, helped by an influx of online shoppers who are abandoning stores and new business for its cloud-computing division.
Jeff Bezos, Amazon, earnings, retail
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2017-23-27
Thursday, 27 April 2017 05:23 PM
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