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Amazon.com expects strong sales in the fall and on Thursday released a profit that was twice as high as Wall Street targets thanks to the retailer's younger, more profitable activities, including cloud computing and advertisement. business hours. The report was a relief for investors in the US tech sector, still under a profit warning by Facebook Inc. on Wednesday that plunged its stock 19 percent.
The Amazon report shows how the largest online retailer has learned to offset the costs associated with fast parcel delivery and video streaming by controlling spending and creating higher-yielding businesses. He was the first to sell data storage and computing power in the cloud, a bet that continues to reap benefits and give him the leeway to invest in large projects
. Amazon's expenses are generally climbing in the summer quarter, putting pressure on the profits that the company is preparing for Christmas and the winter holidays, its
Yet the company expects operating profit of $ 1.4 to $ 2.4 billion, up from $ 347 million a year earlier. The company also announced a profit of 2.5 billion dollars in the second quarter (about 17.1 billion rupees), its largest ever recorded.
"A big contributor to the quarter and the last quarters," said Brian Olsavsky, chief financial officer of Amazon, during a media call. "We have found greater efficiency than expected in our spending in areas such as warehouses, data centers and marketing. "
The Seattle company has removed hundreds of jobs in its headquarters this year – a move that may have lowered costs and freed up resources for fast-growing sectors like Alexa's voice help Alexa
Michael Pachter, an analyst at Wedbush Securities, called the expansion of the gross margin of the Remarkably, he said:
Chief Financial Officer Olsavsky noted that third-party sales were also changing the profit equation for Amazon.The company had been known for years for roller coaster results. 19659002] More read As much as sales of goods that Amazon owns, transactions with third parties offer the company a commission that increases significantly when many shopkeepers do so. Half of all units sold by Amazon come from these vendors, and these sales continue to grow.
Angling for Advertisers
Highly profitable ad sales were positive in the last quarter. The company said that category revenue and other items rose 132 percent to $ 2.2 billion (about Rs 15,000 crores). According to Thomson Reuters, analysts expected $ 2.1 billion
. The company employs to automate the tasks of advertisers and help buyers measure results, adds Olsavsky
. in sales, reaching customers on Amazon with the intention of making purchases. This contrasts with the advertisements that reach users who are on the leaders of the Facebook and Google Alphabet industry.
Amazon Web Services (AWS), the most lucrative unit of the company, saw its operating profit margin increase a year earlier. Sales also increased 49% to $ 6.1 billion, exceeding the average estimate of $ 6 billion
The success of the unit helped make Jeff Bezos, the director General of Amazon, the richest person in the world.
"It's really the crown jewel of the Bezos empire," said Daniel Ives, an analyst at GBH Insights. "They have invested significant amounts in building the infrastructure, sales force and ecosystem of AWS partners around the world who are beginning to pay massive dividends."
While its competitors are gaining ground, AWS Percentage market growth, against 18% for Microsoft Corp and 8% for Google in the second quarter, announced Thursday the company Canalys. Amazon shares, up 55% this year versus 6% for the S & P 500 at Thursday's close, are also trading at a higher price. The price / earnings ratio of the action is more than ten times that of Microsoft.
Cloud sales and advertising, as well as a July event created by Amazon to generate revenue during the summer sales, help the company overcome the high costs during the summer. third quarter,
Amazon sold more than 100 million products during the event and recruited more people into its Prime loyalty club than any other previous day in its history.
Average on Amazon. The company expects sales of $ 54 billion (about 3.7 billion rupees) and $ 57.5 billion in the third quarter, up from $ 43.7 billion a year earlier.
The total second quarter business figure increased 39% to $ 52.9 billion, excluding the average analyst estimate of $ 53.4 billion.
© ] Thomson Reuters 2018
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