Amazon.com Inc. (Nasdaq:AMZN) released its second-quarter earnings report July 26 and largely impressed investors.
The Seattle-based retail giant, which is the world’s largest online retailer, generated US$2.5 billion in profit on US$52.9 billion in sales.
The profit figure is the metric that blew past analysts’ estimates, as it translated into US$5.07 per share, which was more than double the US$2.50 that was expected, according to Thomson Reuters.
Amazon’s profit in the quarter that ended June 30 was also more than 12 times the US$197 million that Amazon generated in the same quarter a year ago.
Sales were slightly shy of estimates, with shoppers spending US$52.9 billion on Amazon products during the quarter. Analysts had expected US$53.41 billion, according to Thomson Reuters
That revenue figure remains impressive, however, because it is up more than 30% compared with the same quarter a year ago, said Globaldata Retail’s managing director Neil Saunders.
“While Amazon makes growth look easy, its advancement is the result of significant effort on at least three fronts,” Saunders said.
Those key areas, Saunders said, include:
•innovating and trying new things to a degree unlike any other retailer;
•being extremely customer-centric across all of the new things that it tries; and
•creating a compelling ecosystem, which permeates many aspects of people’s lives.
“Prime is at the heart of this, and membership makes it both easy and financially sensible to buy into the many products and services Amazon has to offer,” Saunders said. “While Prime is fairly mature in a market like the U.S., the integration of Whole Foods into the mix is bringing on board even more customers. Meanwhile, in other countries, Prime has a lot more runway for growth.”
Future Amazon expansion includes naming the city that is to be the company’s second headquarters, and the company has narrowed that list of cities to 20. Vancouver is not in the running for that prize but Metro Vancouver, with more than 1,800 Amazon employees, is currently the hub outside Seattle that has the most Amazon workers.
The company currently operates distribution centres in Delta, and in New Westminster next to the Braid Street Skytrain station.
About 90% of Amazon’s more than 1,000 workers in downtown Vancouver at the Telus Garden development are software engineers who earn good salaries, Amazon’s general manager for Vancouver operations, Jesse Dougherty, told Business in Vancouver last year.
The company last year announced plans for another 1,000 workers at 402 Dunsmuir Street in Vancouver by 2020, and then followed that up in April with an announcement that it will hire a further 3,000 office workers to work in QuadReal’s The Post development on West Georgia Street, when that project is completed, likely by 2022.
Amazon's shares dropped US$55.61, or 2.98%, to US$1,808 on July 26 during the regular session, but after earnings were released, shares rebounded US$58.95, or 3.26%, to US$1,866.95, in after hours trading.
