In the fourth quarter of 2018, Amazon once again made a profit with its cloud computing division AWS. The quarterly figures also exceeded analysts’ expectations. However, expectations for the first quarter of this year were disappointing, says Silicon Angle.
Earnings amounted to $6.04 per share last quarter, an increase of 61 percent compared to the previous year. Operating income rose by 81 percent to 3.8 billion dollars (3.3 billion euros). Turnover from AWS rose by no less than 45 percent to 7.4 billion dollars. The department’s operating income amounted to 2.18 billion dollars, 61 percent more than a year earlier.
As a result, analysts’ expectations have been far exceeded. They expected a profit of $5.65 per share for the entire company, with an operating income of $3.09 billion. According to analysts, AWS has a turnover of $7.3 billion.
AWS
AWS thus accounted for about 11 percent of all sales, but remains an important source of profit for Amazon. It generates more operational profit than the rest of the company put together. Sales growth was less than one percentage point lower than in the previous quarter. However, the department was able to generate 30 billion dollars in turnover throughout the year.
In the fourth quarter, AWS was able to acquire a series of new customers. These included Korean Air Lines, the biotech company Amgen, Ellie Mae and Guardian Life Insurance. It also unveiled several new services during re:Invent in November.
However, the cloud was not the only source of higher profits for Amazon. For example, there were strong sales during the holidays and the company’s advertising department is growing. The “other turnover” category, which consists mainly of advertisements, almost doubled to $3.39 billion. However, about $1 billion of this was due to a change in accounting last year.
Next quarter
However, for the first quarter of 2019, the company expects few spectacular figures. Turnover is expected to be between 56 billion and 60 billion dollars, which is an increase of 10 to 18 percent. Operating income is expected to be between 2.3 billion and 3.3 billion dollars.
Investors did not seem happy with that prospect. The company’s shares fell by more than 4 percent.
This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.
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