Amazon Reports Third Quarter Profit

Amazon (AMZN) for the first time has reported a quarter profit rather than a loss. The results in Amazon shares skyrocketing in after-hour trading. Investors, and the market as a whole, were expecting a loss as usual, however, Amazon inked out a small profit in the third quarter due to its cloud business. The company would have reported profits before,however, Jeff Benzo has reinvested every single penny of the company earnings back into the company.
Over the last two years, the company has spent $15 billion dollars on warehouses.
Amazon continues to expand their business through their two day shipping for Prime services. The company is now the largest provider of web hosting on the internet. The e-commerce business produces razor thin margins which has lead to Amazon expanding their business into more profitable areas like phones, tablets, video streaming, and cloud services. Amazon is a powerhouse due to Bezos leadership and willingness to report losses after losses to invest in the underlining business.
All of Amazon's investment are beginning to pay off for the company. In the third quarter, the company's reported revenues of $25 billion  up 23% from the previous quarter last year. The company reported net income of $79 million dollars or $0.17 cents, beating Wall Street analyst estimates of $0.13 cents. This higher than expected net income is due to the company's cloud services which is highly profitable. Amazon's cloud service generated $2.1 billion dollars in revenues for the third quarter, upped  $1.billion from the first quarter. The company's cloud service produced operating earnings of $521 million dollars for the third quarter. Clearly the company's cloud service is highly profitable and will continue to grow going forward. Amazon's cloud service is a highly profitable business segment that the company can exploit.
Amazon's cloud service is producing nearly the same amount of operating earnings as their North America retail business. The company's cloud service has become highly important to Amazon and their overall operations.
The company has introduced Prime Day, a full day of sales that offered Black Friday type of deals. Amazon offered their Prime Day for the first time last quarter, and investor and analysts saw the effect of its. The company's Prime Day drove effects on the  company has never disclosed how many subscribers their prime service has, but the company has expanded their services to video streaming and music streaming. Through their studio's, Amazon has created series that are very popular, which includes Transparent, the show that became the first streaming series to win a Golden Globe.
After reporting its third quarter results, Amazon gave their guidance. The company believes that they will have a strong fourth quarter, and plans on hiring 100,0000 temporary workers. Amazon is expecting revenues between $33.50 billion dollars and $36 billion. The company is expecting their operating earnings to between $80 million and $1.23 billion.
Clearly the company is expecting a hell of a fourth quarter because of Christmas.
Published on Nov 10, 2015
By Cody Eustice
Cody is a freelance writer who has been writing financial articles for various sites for over a year now. He is a value investor looking for companies that sell for far less than their estimated business value.

Copyrighted 2020. Content published with author's permission.

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