Amazon's profit more than doubles on cloud computing growth

Oscar PerryApr 27, 2019

The two companies over the next few months planning to launch an official YouTube app on Amazon Fire TV devices and Fire TV Edition smart TVs, as well as the Prime Video app for streaming to Chromecast and Chromecast built-in devices. In countries like the UK, Amazon already offers one-day delivery.

A Prime member is now required to order at least $35 worth of eligible products for free one-day shipping, an option not available for all Prime items. Amazon also can't compete with Walmart and Target, where ordering online and picking up at a store is becoming more popular with shoppers.

AWS had $7.7 billion in sales, with a growth rate of 41 percent year-over-year. Well, the good news is Amazon is looking to make shipping even better by cutting shipping time in half for Prime subscribers.

Analysts were looking for earnings of $4.72 per share on revenue of $59.65 billion.

Amazon.com brought in a record US$3.6 billion ($5.4b) in profit during the first quarter of 2019, more than doubling its profit from a year ago and continuing its streak of record-breaking earnings.

Advertising is another fast-growing source of revenue for Amazon. "There'll be times when we have to invest ahead to build out warehouse capacity, but right now we are on a nice path where we are getting the most out of the capacity we have".

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Sales surged at Amazon Web Services (AWS), which provides computing services to companies over the internet - a service know as cloud computing.

Sales in Amazon's "other" segment, which is mostly advertising, increased 34 percent, to 2.72 billion.

The company did not say when the one-day delivery will roll out in the states, but did say it's been adding items that will be available for the service. The company's digital advertising franchise has grown into the third largest in the USA, trailing only Alphabet Inc.'s Google and Facebook Inc., researcher EMarketer estimates. That has given investors confidence the company can continue to expand its profitability, even as fellow technology giants like Alphabet and Facebook see their margins narrow, Thill said.

Technology and content expenses, which is primarily payroll for research-and-development work, and the cost to stow, pack and ship inventory, grew at a slower pace than in recent quarters.

For the second quarter, Amazon expects net sales between $59.5 billion and $63.5 billion.

Amazon's advertising business came down to earth, with growth of only 36 percent, a decrease from past periods, but still helping the company post robust profits.

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