Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Amazon Sees Twelve-Fold Increase in Profits, as Sales Jump 39 Percent

The Amazon juggernaut picked up speed in the second quarter, with growth in every category and region even before Prime Day results were in.

In a Nutshell: Fresh off the fourth annual Prime Day, which it said was the company’s biggest global shopping event ever, welcoming more new Prime members on July 16 than any other previous day in its history, Amazon posted a net 39 percent sales increase to reach $52.9 billion and net income increased twelve-fold to reach $2.5 billion in the second quarter ended June 30.

Amazon said its members purchased more than 100 million products on Prime Day, with the best-selling items worldwide the Fire TV Stick with Alexa Voice Remote and Echo Dot. Small and medium-sized businesses selling on Amazon exceeded $1.5 billion in sales during the Prime Day event.

During the quarter, Amazon Fashion launched Prime Wardrobe in the U.S., allowing Prime members to try on clothing, shoes and accessories before buying. Customers can choose from eligible styles, have up to seven days to try them on at home and pay only for the items they decide to keep.

In the logistics area, Amazon announced an offering during the period that helps entrepreneurs build their own companies by delivering Amazon packages. Business owners can grow their companies by accessing Amazon’s delivery technology and package volume, as well as receiving discounts on a suite of assets and services such as vehicle leases and comprehensive insurance.

Amazon Business expanded to Italy and Spain, and now serves businesses in eight countries across the globe, including the U.S., U.K., Germany, Japan, India and France. Amazon Business now ships to business customers in 70 countries.

Amazon Web Services said thousands of enterprise customers are running SAP workloads on AWS to simplify infrastructure management, improve time-to-market, lower costs and deliver innovation. In its second year of availability, the number of databases migrated to AWS using the AWS Database Migration Service has grown to more than 80,000.

“Amazon posted a blow-out quarter by virtually any measurement, with the global retail business turning profitable as North America…posted operating income of over $1.8 billion and an operating margin of 5.7%,” Moody’s lead retail analyst Charlie O’Shea said. “AWS continued its run, with 49 percent revenue growth.”

O’Shea noted that shipping costs were up around $1.4 billion year-over-year, “indicating growth in this program is continuing at a meaningful clip, and liquidity remains robust with around $27 billion in cash and marketable securities.”

Sales: Net sales increased 39 percent to $52.9 billion in the second quarter ended June 30, compared with $38 billion in second quarter of 2017. This included a $760 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter. North American net sales rose 44 percent, while AWS net sales grew 49 percent in the three months.

Earnings: Net income more than doubled to reach $2.5 billion in the second quarter, compared with net income of $197 million in the year-ago period. Operating income increased to $3 billion in the quarter from $628 million in prior-year period.

CEO’ Take: Jeff Bezos, Amazon founder and CEO, said: “There are now tens of thousands of developers across more than 150 countries building new devices using the Alexa Voice Service, and the number of Alexa-enabled devices has more than tripled in the past year. Our partners are creating a wide variety of new Alexa-enabled devices and experiences, including soundbars from Polk and Sonos; headphones from Jabra; smart home devices from Ecobee and First Alert; Windows 10 PCs from Acer, HP and Lenovo, and cars from automakers including BMW, Ford and Toyota.”

More from our brands