Amazon starts the year with record profits

That's what shareholders dream about, and Amazon's share price should skyrocket after hours. But in reality, that was enough for only about ten dollars, or 0.5% more. Between the two, the course has even been considerably reduced.

Because Amazon has warned that the current quarter will not be to the taste of shareholders. Sales could only increase marginally, with the target range set at € 59.5 billion at € 63.5 billion, with earnings well below expectations.

One reason is rising costs. In lieu of a free delivery within two business days, Amazon wishes to guarantee its customers "Prime" fast delivery on the same day. Free. This does not mean less additional labor in warehouses, more warehouses and investments in the overall logistics. It is still unclear when it should begin, but CFO Brian Olsavsky has already announced costs amounting to $ 800 million during the quarter to move the process forward. Globally, the Group claims to have more than 100 million customers of choice, all of whom pay annual fees.

This clearly indicates the profit margin: in this context, the importance of the Amazon AWS cloud division for the group can not be overstated. With a turnover of $ 7.7 billion, which represents only 13% of total business, the division generates $ 2.23 billion, or 50% of the Group's operating income. .

But the competition is becoming more and more mbadive. Microsoft, number two behind AWS, announced Wednesday a 73% growth in its cloud, which would reduce the gap. Google, by far the number three, said in early April at its conference "Cloud Next" in San Francisco the unconditional desire to catch up with the duo. Google will release numbers next week.

The problem: Amazon is active in many areas and can quickly duplicate AWS customers. One of the reasons why health and retail companies like to choose Microsoft or Google. They fear that Amazon, which invests heavily in retail and drug trading, may benefit from its activities on AWS.

The importance of AWS to fund its ambitious strategy was reiterated in the last quarter. Aside from AWS, the annual report contained virtually no highlights.

There is traditional retail, including Whole Foods. An increase of one percent to 4.3 billion is in the books. The competitors of Walmart, Kroger and Target have long since recovered their rigidity to shocks and go mbadively to Amazon. It even seems that the old giants could win the game and that Amazon could propose, even in their own element, selling online.

All competitors have been able to produce good to medium results so far. And even though Amazon had already launched the third round of price cuts at Whole Foods during the quarter. The industry is currently very curious to know if Amazon, with the well-stocked war chest, will trigger a new price war in retail, which is already operating only with clear margins. This could be another explanation for the moderate quarterly forecasts.

At the moment, the online advertising sector is running out of steam: the 36% growth of the "Other" division, where the advertising sector is still hidden at $ 2.7 billion, Sounds healthy at first. But growth rates of 100% were the rule last year. It is important to monitor the evolution of the situation: online advertising has recently been the fastest growing market of the future. Advertising by the controversial speakers "Alexa" should give him a boost.

The mixed picture was enough to spoil Amazon's satisfaction. Unlike Microsoft the day before, Amazon could not break the $ 1 trillion mark for a few minutes. It could take a few more months now.

more: Digitization is driving business profits up, but data needs to be evenly distributed, said EU Commissioner Margrethe Vestager.