Flickr - Soumit
Amazon’s share price shot up by 18% after reporting a surprise $92m profit for the second quarter of 2015, in stark contrast with analysts’ predictions and the $126m loss in the same quarter a year ago.
The online retailer said net sales increased by 20% to $23.18bn, well ahead of analysts’ predictions of a 16% increase to $22.4bn.
Amazon said the revenue increase would have been 27% compared with the previous year, had it not been for the $1.39bn unfavourable impact from year-over-year changes in foreign exchange rates.
Operating income was $464m, compared with operating loss of $15m in second quarter 2014.
“The teams at Amazon have been working hard for customers,” said Amazon.com founder and chief executive Jeff Bezos.
He said highlights of the year so far included the opening of Amazon Mexico, the launch of Amazon Prime free same-day delivery, the launch of 350 “significant” Amazon Web Services (AWS) features and services, and the signing of agreements for new solar and wind farms that will ensure Amazon exceeds its 2016 goal of 40% renewable energy.
Amazon did not reveal which products were responsible for the second quarter’s success, but one of the biggest contributors was AWS, with sales growing by 81% to $1.8bn, and profit up by 408% to $391m.
Amazon also offered a better-than-expected outlook for the current quarter, predicting revenues in the range of $23.3bn to $25.5bn.
Despite the financial success of the second quarter, Amazon could soon face an investigation of its power in the book market, reports The Guardian.
The company recently told authors whose works is available through Kindle Owners Lending Library that they will no longer be paid $1.30 per download, but at a rate of $0.006 per page read.
This means that only authors whose books are 220 pages long or longer and are read from cover to cover will make the same or more in future.
Two weeks later, top authors including Malcolm Gladwell, Ursula Le Guin, Michael Chabon and Ann Patchett sent a letter to the US Department of Justice attacking Amazon’s “abuse of its dominance in the world of books” and calling for an investigation into its “power over the book market”.
Read more about Amazon Web Services
- Amazon SimpleDB is a hosted database as a service that enables developers to store and query structured data items via Web services request
- Software development kit functionality is a big reason why developers flock to Amazon Web Services. AWS public cloud supports a range of SDKs and programming languages
- Amazon Web Services (AWS) has debuted a managed service for developers seeking a simpler way to incorporate machine learning processes into their apps
Read more on E-commerce technology
AWS downplays risk of competitors threatening its public cloud dominance during Q4 results
AWS growth rate slows in Q2, as Amazon retail's run of quarterly record profit growth ends
AWS reports fourth quarter revenue growth of 45% as public cloud demand continues apace
AWS’s sales up almost 50% year-on-year in second quarter