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On Thursday, Amazon followed a trend among the nation’s biggest tech firms. The company said it made more money last quarter than last year — a lot more money.
The company said sales in the three months ending June reached $113.1 billion, up 27 percent from the previous year when the quarantines were at their most extreme. It posted a profit of $7.8 billion, up 48 percent from $5.2 billion a year ago.
The results were a sign that even as businesses reopened after the height of the pandemic, many people continue to do their shopping online, and much of that business continues to make its way to Amazon. Other biggest tech companies – Apple, Facebook, Google and Microsoft – reported blockbuster results this week.
But Brian Olsavsky The company’s chief of finance said in a phone call with reporters that online sales growth has slowed somewhat as more people shop and spend more time on vacation or socializing. “It’s all good,” he said, “but that leads them to do other things besides shopping.”
Shares of Amazon fell more than 5 percent in aftermarket trading as investors expect sales to be even higher and the outlook for the next quarter to be more rosy. Amazon is worth nearly $1.8 trillion, more than double its pre-pandemic value.
Amazon’s profit exceeded investor expectations as its most profitable businesses continued to flourish. The cloud computing division is now larger than most companies – Morgan Stanley estimates it is worth $600 billion – and growth continues to be strong. Cloud computing sales increased 37 percent to $14.8 billion. The “other” business segment, primarily the advertising business, increased 87 percent to $7.9 billion. And in its consumer business, Amazon’s revenue from marketplace seller fees totaled $25 billion.
Subscriptions, largely Prime memberships, brought in $7.9 billion. Nearly 200 million people are now Prime members, and a recent analysis by Consumer Intelligence Research Partners found that they shop on Amazon an average of 27 times a year, nearly twice as often as non-Prime customers.
Amid a construction boom to expand its supply and delivery network, the company added 64,000 more workers in the last three months and now employs more than 1.3 million people – 52 percent more than at this time last year. In the competitive labor market, Amazon has increased wages, which Mr Olsavsky calls “one of the biggest inflation drivers in our business right now.” He said the company expects to open many new facilities in the coming months as we enter the holiday shopping season.
Comparing Amazon’s performance to last year’s is a bit of a challenge this quarter. Last year, there was a huge increase in the company’s sales. set his staff and other parts of its business to better meet demand from the pandemic. But this year too, Amazon’s Prime Day deals activity fell in June instead of October, providing another boost in revenue this quarter. JP Morgan estimates that this year’s event generated approximately $8.4 billion in sales.
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