Amazon Is Finally Profitable, Earns $2.5 Billion Over the Last Three Months (cnn.com) 75
An anonymous reader quotes CNN:
Amazon topped $2 billion in quarterly profit for the first time in its history, an impressive run fueled by continued growth in Prime subscriptions, cloud computing and its nascent advertising business. Amazon said Thursday that it earned $2.5 billion in profit for the three months ending in June, a staggering jump from the $197 million it posted in the same period last year. It marked the third consecutive quarter that Amazon has topped $1 billion in profit, a remarkable feat for a company once known for investing so much in its business that it often lost money. "The profitability trajectory appears to be accelerating quicker than expected," Daniel Ives, an analyst with GBH Insights, wrote in an investor note Thursday. Ives called this a "potential game changer" as Amazon continues to invest heavily in fulfillment centers, new stores and pricey content deals....
Earlier this month, Amazon's market value topped $900 billion for the first time, putting it on the cusp of eclipsing Apple as the world's most valuable company.
Amazon's cloud computing business, Amazon Web Services, had $6 billion in sales, while Amazon's $119-a-year "Prime" service for faster shipping now has more than 100 million users.
Qwartz says the results -- which are over 12 times more than Amazon earned in the same quarter a year ago -- prove that Amazon "can make loads of money when it actually feels like it."
Earlier this month, Amazon's market value topped $900 billion for the first time, putting it on the cusp of eclipsing Apple as the world's most valuable company.
Amazon's cloud computing business, Amazon Web Services, had $6 billion in sales, while Amazon's $119-a-year "Prime" service for faster shipping now has more than 100 million users.
Qwartz says the results -- which are over 12 times more than Amazon earned in the same quarter a year ago -- prove that Amazon "can make loads of money when it actually feels like it."
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Trump has called everything fake news except The Daily Show... time to reset.
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If employees wanted to share in Amazon profit increases, then they should have used some of their wages to purchase shares of Amazon stock. And No... (1) Amazon can't afford to do that: At least not for a significant portion of Amazon employees (Managers and those responsible for profit can be rewarded). At least not until Amazon automates their business and massively reduces the number of required employees (then the remaining employees can be paid more). And (2) Business doesn't work that way.
Re: Good (Score:5, Insightful)
They have a better business model.
The lowest costs of labor are slavery and/or indentured servitude. As a society weâ(TM)ve decided those arenâ(TM)t fair and made laws to stop them.
If we want a better world we make laws to drive bad behavior out of business.
If you want amazon to pay its people more you raise the minimum wage to a livable wage and you increase taxes on rich people.
Those are not going to happen in this second gilded age.
I have no idea what is going to snap but the way things are going it seems unsustainable for it to continue unabated.
Re: Good (Score:2, Troll)
What the hell are you on about? Why would you raise taxes on the rich to support a minimum wage? The minimum wage isn't subsidized by taxes. Lowering business taxes and employment taxes would support higher wages, since it comes from the coffers of companies. Also, slavery is involuntary. The employees at amazon can quit at any moments notice.
I agree they should earn more, and they can. Every bank in the US has a trading account product. They could simply procure shares in the company they work. Had they do
Re: Good (Score:3)
People who can barely afford to feed and house themselves should buy shares in Amazon. What with?
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Costco is great if there’s one nearby, and you have enough disposable income to ignore the membership fee. But if you’re in the middle of nowhere, tough. They’re not serving
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Re: Good (Score:2)
Taxes doesn't pay salaries. So how do that make sense?
We don't have a minimum wage in Sweden or Norway.
We do have high taxes and welfare and public paid education though.
Why should the state remove jobs by setting a minimum wage?
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They have a better business model.
It is not better... they just serve a smaller clientele with a smaller number of products than Amazon.
Hence Costco's financial results are poor compared to Amazon.
The lowest costs of labor are slavery and/or indentured servitude. As a society we've decided those aren't fair and made laws to stop them.
Nope. It isn't that they are "unfair". There is no "right" to fairness, only basic human dignity.
The laws that were made are not about "fairness" whatever that is.
We
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Amazon, on the other hand, must spend money on human labor and mechanical systems to perform the picking operation for each consumers order and then do more time consuming packing operation compared to brick and mortar (just place it in a bag). In a DC/Ware
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Don't forget Amazon is retail, and retail typically does a lot of extra business in Fourth Quarter/December.
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The employer match for SS&Medicare is 7.5%, not 15.
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Re:Good (Score:5, Insightful)
Managers and those responsible for profit can be rewarded
Huh? Are you saying that the people who make the webshop and who actually handle the goods that I order -- the people doing the actual work -- are not responsible for making the profit? If so, why doesn't Amazon fire everyone who are not managers and above, because they are the only ones producing an income?
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Because those people employed there work for slave wages and the "luxury" of losing their job if they don't "volunteer" for overtime.
Amazon offers stocks to people that are with the company for more than two years; the high turnover rate illustrates the challenge that presents for most employees.
The value in working at Amazon is getting to put "Amazon" on a resume`...if you're lucky you won't be so burned out that you can move onto somewhere else that pays shite.
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4k/year/employee raise would not totally erase their annual profit. It'd erase a 1/4 their profits.
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4k/year/employee raise would not totally erase their annual profit. It'd erase a 1/4 their profits.
Yeah it pretty much would.... Did you bother to look at their financials?
This is a manner in which leverage works; destroying $2.2 Billion in Value by paying it out to employees instead of legitimate capital expenditure can actually erase $20 Billion from earnings after it knocks over a whole bunch of dominos, by reducing margins and affecting operating margin/expenses, which include and affect financ
Comparisons to some other companies (Score:3)
The summary mentioned $900 billion stock price on profit of $2.5/quarter, or $10 billion / year. So that's a multiple of 90 - saying the company is worth 90 times as much as it earns.
Amazon had revenue of $177 billion, so the stock price is five times revenue.
The ratios are important to investors - they tell you how much investors earn per dollar invested. For Amazon, every dollar invested means your share of profit is 11 cents.
Here are some comparisons to other companies.
General Mills: $16B revenue, $2.5B profit, $26B valuation. Ratios: 1.6 x revenue, 10x profit.
Hewlett Packard: $28B revenue, $3B earnings, $24B valuation. Ratios: 0.8x revenue, 8x earnings.
H&R Block $3B revenue, $0.8B earnings, $5B valuation
Ratio: 8x earnings, 2x revenue.
Charter Communications: $42B revenue, $8B earnings,
$65B valuation. Ratios: 8x earnings, 1.5x revenue
Macy's: $25B revenue, $1.5B earnings, $12B valuation. Ratios: 7.5x earnings, 0.5x revenue.
Kraft Heinz: $26B revenue, $11B earnings, $73B valuation. Ratios: 6.7x earnings, 2.8x revenue.
Tesla: $12B revenue, -$3B earnings, $51B stock valuation. Ratios: -17x earnings, 4x revenue.
So typically for an established company, for each dollar invested you should see about 12 cents profit. Tesla is of course the exception in the list. For each dollar invested, there was 25 cents lost.
Decimal point missing (Score:2)
I just realized I was missing a decimal point in my post.
Amazon's profit is about 1.1% of its stock price, not 11%. Each dollar invested earns 1.1 cents profit.
More typical, all of the other listed companies, is about 12% profit.
Re:Comparisons to some other companies (Score:4, Informative)
Except you left out the obvious actual comparators for Amazon: Apple, Google and Microsoft.
Apple, $229B revenue, $48.3 profit, $941B valuation. Ratios: 4.1x revenue, 19.5x earnings
Google, $110B revenue, $12.6B profit, $859.6 valuation. Ratios: 7.8x revenue, 68.2x earnings
Microsoft, $90B revenue, $21.2B profit, $836.5B valuation. Ratios: 9.29x revenue, 39.5x earnings
So amazon looks most like Google at the moment, but I suspect Amazon has more headroom for profit growth in the short term than Google does.
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That's AWS's competitors, compare Amazon.com to Sears, Walmart, and Barnes and Noble...
This is excellent news for Uncle Sam (Score:1, Troll)
I hear they also paid record taxes in the US. Something like a dollar ninety-eight on that two billion.
Or maybe a little less.
"Finally profitable"? (Score:1)
Amazon's first profitable quarter was Q42001. That's almost 17 years ago, EditorDavid. What is up with your misleading headline?
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Old media chestnuts die hard... Amazon existed for several years unprofitable, but now is a 1000+ a share stock.
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Not a single word of that makes any sense. What is it you are you trying to write?
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Amazon has been profitable for the last several years, so this year's profit is no big surprise.
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Prime subscriptions (Score:5, Insightful)
Most of this is coming from AWS (Score:2)
In 2017 Amazon's ecommerce division actually lost money globally [zdnet.com].