Amazon Misses Revenue but Crushes Earnings in Q2
It was another billion-dollar-plus quarter in terms of profit for Amazon—the company’s third in a row. During a call with analysts on Thursday night, the e-commerce giant—the #1-ranked CE retailer in our Top 101 list—reported second-quarter revenue came in at $54.29 billion, just short of the estimated $53.41 billion. But earnings per share checked in at $5.07 versus an estimate of $2.50.
Perhaps even more impressively, Amazon saw its net income increase an astounding 12-fold from the same period a year ago to a record $2.5 billion.
According to analysts, the incredible profit growth for Amazon is largely driven by the company’s high-margin businesses like cloud services and advertising. Amazon CFO Brian Olsavsky pointed to those two services in particular during a conference call, saying they were “big contributors” to the company’s profit growth. The retail business, by comparison, runs on razor-thin margins, which is no surprise given the deep discounts the company offers on products on a very consistent basis.
Diving deeper into the numbers behind the cloud service, Amazon noted that despite increased competition from Microsoft and Google, the service experienced 49 percent growth year-over-year. Cloud drove $6.1 billion in revenue, which accounted for just 11 percent of the company’s total sales. However, it’s operating income of $1.6 billion accounted for 55 percent of that record $2.5 billion in the quarter.
Other figures of note:
- Total revenue, which includes sales from Whole Foods, increased 39 percent year-over-year. North American revenue grew 44 percent to $32.1 billion; international revenue jumped 27 percent to $14.6 billion.
- Whole Foods sales during the quarter totaled roughly $4.3 billion.
- Revenue guidance for Q3 fell below expectations. Amazon set a range of $54 billion to $57.5 billion, slightly below the $55.6 billion to $62.2 billion analysts expected.
- Amazon’s workforce grew to a record-high 575,700 employees during the quarter, up 51 percent from last year, and up 2 percent from last quarter.
Amazon’s stock price climbed 3 percent during extended trading.