Amazon had a brilliant June quarter and its shares rose 1.8 percent, on the news pushing up its market capitalisation by about $6 billion to around $361 billion.
The company Amazon is the undisputed leader in cloud computing, although Microsoft and Alphabet are both nipping at its heels and getting under its feet. Amazon’s global retail sales also beat estimates in the quarter.
While in 2015, AWS revenue read $1.82 billion, this year, the service managed to pull $2.89 billion. That arm of Amazon is essential to maintaining investors’ faith in the company, as it crafted itself as the best provider of services for large corporations, government agencies and even startups.
During the second quarter, Amazon banked $857 million profit. One year earlier, the e-merchandizer and internet service provider scored only $92 million. Sales surged from $23.19 billion to $30.4 billion.
The e-vendor is preparing to enter harder on the retail market as well. The company scored a higher market value than Wal-Mart in 2015, and it started to deploy its own brick-and-mortar stores around the United States.
Amazon also saw the advantages of incentivizing its customers with the $99-per-year Prime unlimited shipping membership. The offer smoothened out the online sales by a long shot, and Amazon decided to upgrade the program. It did so by deliveringexclusive video streaming content and music. Also, a select few goods in a number of cities benefit from a one-hour-delivery time frame.
One challenge for the company, if it wants to maintain the growth and profit rates, is managing shipping costs. These expenses surged by 42 percent during the first three months of the year. Previously, shipping costs jumped by 37 percent in the holiday quarter of 2015.
According to Amazon’s estimation, it spent $3.36 billion in shipping expenses during Q2.
The company’s attempt to better handle shipping costs means that it must handle the “last mile” of the transport on its own. To make this happen, it purchased 40 planes and branded truck trailers.
The company is confident that it will rise in both revenue and profits and estimates that Q3 will bring it sales ranging from $31 billion to $33.5 billion. Meanwhile, analysts are gauging the figure at $31.63 billion.