Amazon Misses Revenue but Crushes Earnings in Q2
It was another billion-dollar-plus quarter in terms of profit for Amazon—the company’s third in a row. During a call with analysts on Thursday night, the ecommerce giant—the #1-ranked CE retailer in our Top 101 list—reported second quarter revenue came in at $54.29 billion, just short of the estimated $53.41 billion. But earnings per share checked in at $5.07 versus an estimate of $2.50.
Perhaps even more impressively, Amazon saw its net income increase an astounding 12-fold from the same period a year ago to a record $2.5 billion.
According to analysts, the incredible profit growth for Amazon is largely driven by the company’s high-margin businesses like cloud services and advertising. Amazon CFO Brian Olsavsky pointed to those two services in particular during a conference call, saying they were “big contributors” to the company’s profit growth. The retail business, by comparison, runs on razor-thin margins, which is no surprise given the deep discounts the company offers on products on a very consistent basis.
Diving deeper into the numbers behind the cloud service, Amazon noted that despite increased competition from Microsoft and Google, the service experienced 49 percent growth year-over-year. Cloud drove $6.1 billion in revenue, which accounted for just 11 percent of the company’s total sales. However, it’s operating income of $1.6 billion accounted for 55 percent of that record $2.5 billion in the quarter.
Other figures of note:
- Total revenue, which includes sales from Whole Foods, increased 39 percent year-over-year. North American revenue grew 44 percent to $32.1 billion; international revenue jumped 27 percent to $14.6 billion.
- Whole Foods sales during the quarter totaled roughly $4.3 billion.
- Revenue guidance for Q3 fell below expectations. Amazon set a range of $54 billion to $57.5 billion, slightly below the $55.6 billion to $62.2 billion analysts expected.
- Amazon’s workforce grew to a record-high 575,700 employees during the quarter, up 51 percent from last year, and up 2 percent from last quarter.
Amazon’s stock price climbed 3 percent during extended trading.
What We’re Reading
- Facebook sheds more than $100 billion in market cap, continuing worst week in company’s history. (The Guardian)
- Revamped Apple Store App adds voice search functionality. (Engadget)
- Verizon is auctioning off some pretty cool pieces of telephone history. (Gizmodo)
What You Should Be Listening To
Dealerscope just released five new episodes of our Podcast. This time around we feature:
- Michael Rall, an assistant professor of industrial design at Appalachian State University, who talks about the schools Future of Retail program.
- HumanEyes General Manager Jim Malcolm who dishes his knowledge on VR imaging and other emerging tech in the digital imaging space.
- Florian Hutterer of PIQ shares the story of how the smart sport sensor landed on the shelves at Apple stores.
- The lead author of Walker Sands’ 2018 Future of Retail report Erin Jordan discusses some of her key findings.
- And Win Cramer, CEO of JLab Audio, comes on to talk about how his company is strategizing around tariffs, and what efforts their putting forth to educate the retail and consumer tech industries about their potential impact.