Thanks to strong growth in its cloud computing division, Amazon has presented better quarterly figures than expected. The company’s turnover increased by 17 percent to 59.7 billion dollars (53.5 billion euros). The net profit amounted to 3.56 billion dollars, which is more than twice as much as the 1.6 billion dollars a year earlier. Operating income also more than doubled to $4.4 billion.
This far exceeded Wall Street’s expectations, writes Silicon Angle. Analysts expected a net profit of $2.3 billion with sales of $59.65 billion.
Most of the profits came back from the company’s cloud department. Cloud revenues rose 41 percent from a year ago to $7.7 billion. That’s just a little more than analysts expected. Operating income rose by 59 percent to 2.22 billion dollars.
The department’s revenue growth slowed slightly compared to the fourth quarter, when the growth was 45 percent. According to Chief Financial Officer Brian Olsavsky, this is partly due to a very good quarter for Amazon Web Services (AWS) last year. This makes comparisons more difficult.
In addition, according to Olsavsky, things in this area are always a little more difficult to predict, because there are uncertainties about how quickly companies adopt AWS and the cloud and migrate operations from their own data centers. However, customer use of AWS services remains more than turnover growth.
Not only the cloud department, but also the advertising department of the company saw considerable growth. Amazon’s “other” segment – which mainly consists of advertising sales – saw its turnover increase by 34 percent to $2.72 billion. According to eMarketer it is now the third largest seller of digital ads, behind Google and Facebook.
Amazon has revised its expectations for the current quarter. The company expects sales between 59.5 billion and 63.5 billion U.S. dollars, which is in line with Wall Street’s expectation of 62.4 billion U.S. dollars. The expected operating income between 2.6 billion and 3.6 billion dollars is, however, lower than the expectations of Wall Street. They expect an operating income of $4.19 billion.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.