Economy

Amazon sales up 39% as Jeff Bezos praises rise of Alexa

Amazon sales up 39% as Jeff Bezos praises rise of Alexa

Amazon reported that its AWS division generated US$6.11 billion in revenue for the second quarter, ended 30 June.

Shares of Amazon.com stock opened at $1,863.61 on Thursday.

Amazon threatens to match, or even eclipse, Apple's market value, which would make it the world's most valuable company.

The company's "other" category, said to consist "primarily" of advertising services, topped $2 billion in sales in the first quarter, more than doubling the year prior.

A July event that the company created to drum up business during the summer shopping lulls, Prime Day, has become a bonafide event to rival Black Friday.

Amazon added 800 new services and features so far this year, its largest to date.

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As an e-commerce behemoth whose online sales account for nearly half of the total in the United States, Amazon expects its revenue to grow to between 54 billion to 57.5 billion dollars in the third quarter, with a projected operating income of 1.4 billion dollars to 2.4 billion dollars.

Amazon, which accounts for about half of the online retail sales in the USA, has "the most robust and durable growth outlook" of any company in the FAANG group, which includes Facebook (FB), Apple (AAPL), Netflix (NFLX), and Alphabet's Google (GOOGL), Canaccord Genuity analyst Michael Graham wrote in a note to investors this month.

Apparel, in particular, could prove to be a major growth area for Amazon over the medium-to-long term.

"We want customers to be able to use Alexa wherever they are", he said in a statement. "There are now tens of thousands of developers across more than 150 countries building new devices using the Alexa Voice Service, and the number of Alexa-enabled devices has more than tripled in the past year", Bezos said.

Amazon Web Services' net sales came to $6.1 billion for the quarter, growing 49 percent year-over-year.

Amazon's total revenue, which includes sales from Whole Foods, increased 39 percent year-over-year.

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By almost every metric, Amazon met or exceeded expectations, and demonstrated the strength of its Amazon Web Services cloud division and revenue from its relatively new advertising service.

"It was a strong quarter", said Amazon's CFO, Brian Olsavsky, in the earnings call. "We've seen a greater-than-expected efficiency in a lot of our spend in things like warehouses, data centres, marketing".

Amazon's net income saw a whopping 12-fold increase from the year-ago period, to a record $2.5 billion, marking the third consecutive quarter of surpassing $1 billion in profits.

The Seattle tech giant posted revenue of $52.9 billion which was estimated $2.49 per share and profits of $2.5 billion more than analysts' expectations of $2.50 per share. It measures how much out of every dollar of sales a company actually keeps in earnings.

Hiking the annual United States price of Prime 20 percent during the second quarter showed few signs of discouraging sign-ups.

For UK customers, Amazon Prime costs £79 a year or £7.99 per month. Click to get this free report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report International Business Machines Corporation (IBM): Free Stock Analysis Report Amazon.com, Inc.

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