Strong Beat Across the Board, Amazon Prime Day to Take Place in June
The world’s largest ecommerce company Amazon reported that it earned $15.79 per share to absolutely crush the $9.54 per share expected from the market analysts. Business sales for Q1 came in at 108.52 billion to mark a 44% increase compared to a year ago. Wall Street was calling for revenues of $104.47 billion.
Investors were also happy to hear that the ecommerce company confirmed that Amazon Prime Day will take place in June, which is likely to provide a major boost for business sales in Q2. On this day, Amazon Prime subscribers enjoy a two-day discount across the platform. Last year’s event was moved from July to October amid the pandemic.
“In many areas, July is vacation month, so it might be better for customers, sellers and vendors to experiment with a different time period. We believe that it might be better timing later in [the second quarter], so that’s what we’re testing this year,” CFO Brian Olsavsky said on a call with investors.
However, the ecommerce company said that it has continued to witness weaker demand for its physical stores business, which includes Whole Foods Market and other business units. In this segment, revenues fell 16% to $3.9 billion.
As expected, Amazon’s cloud business AWS (Amazon Web Services) recorded a 32% jump in year-over-year (YOY) revenues to $13.5 billion as it continues to enjoy a dominant market position, ahead of Microsoft’s Azure and Google Cloud.
“In just 15 years, AWS has become a $54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating—up 32% year over year. Companies from Airbnb to McDonald’s to Volkswagen come to AWS because we offer what is by far the broadest set of tools and services available, and we continue to invent relentlessly on their behalf,” CEO and founder Jeff Bezos wrote in a statement.
Bezos also said that Amazon Prime has more than 200 million subscribers, with almost 90% of them spending over 70% more time streaming content in Q1 than a year ago. On a YOY basis, the company added around 50 million new subscribers to its Amazon Prime platform.
A Q1 was also marked by a faster growth rate recorded in markets outside of the United States (US), where business sales rose by 60%, compared to 40% in the States. The company is planning to spend about $1.5 billion on the pandemic-related costs in Q2 while operating income is projected between $4.5 billion and $8 billion.
In addition to Amazon Prime Day taking place in June, the ecommerce company added that it expects to record revenue in a range of $110 billion and $116 billion in Q2, with the midpoint of $113 billion coming in higher than the $108.6 billion consensus.
Ecommerce company Amazon reported better-than-expected sales for Q1 and continued strength in its cloud business AWS, while quarterly profit figures smashed analysts’ views.
About the Author
Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.