Amazon beats on profit, disappoints on revenue

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Even more crucially, more people joined Prime on July 16 than on any previous day in the company's history, Amazon said.

Meanwhile, Amazon Web Services, the company's cloud-computing business, saw sales jump 49% from the second quarter past year, to $US6.11 billion.

The company accounts for almost half of all online retail sales in the United States. Excluding the $760 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 37% compared with second quarter 2017.Operating income increased to $3.0 billion in the second quarter, compared with operating income of $628 million in second quarter 2017.

Amazon's cloud service re-accelerated its sales growth for the third straight quarter, to 49% year-over-year, despite increased competition from Microsoft and Google.

While the company's fulfilment costs surged almost 54% in the quarter, all of its other costs - fulfillment, marketing, technology, administrative - grew much slower than its sales. "That gives us faith in the long-term story because eventually all of Amazon's growth opportunities will come to an end".

Investors are starting to take notice.

Chief executive and founder Jeff Bezos, whose Amazon stake has made him the world's richest person, used the quarterly update to highlight Alexa, the digital assistant that powers Amazon electronics along with cars, appliances and other connected devices. Canaccord Genuity reaffirmed a "buy" rating and set a $2,000.00 price target (up from $1,800.00) on shares of in a report on Thursday, July 12th. It is meant to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period.

It wasn't just growing businesses driving Amazon's profitability.

"It was a strong quarter", Brian Olsavsky, Amazon's chief financial officer, said on a conference call with analysts.

Olsavsky outlined some factors influencing that change in growth rate, the first being that Amazon had very strong unit growth past year in Q2, so it was tougher comparison. In percentage terms, that's the slowest growth for the first half of the year since the depths of the financial crisis in 2009.

The company is working to automate tasks for advertisers and to help media buyers measure the results, Olsavsky said.

In this July 19, 2018, photo, a US postal carrier delivers Amazon orders to an apartment complex in downtown Pittsburgh.

Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City, U.S., January 29, 2016.

Amazon's total revenue, which includes sales from Whole Foods, increased 39 percent year-over-year. The company has introduced new machine learning tools for developers, and invested in new companies through the Alexa Fund.

The AWS division generated US$1.64 billion in operating income for Seattle-based Amazon during the second quarter, compared to US$916 million during the same period of 2017.

The online retailer posted revenue of $52.8 billion in the period, less than the $53.4 billion expected by analysts surveyed by Zacks Investment Research. "Earnings per share were $5.07, smashing analysts" estimations of $2.50.