Amazon’s First Quarter Earnings – And What’s To Come
Analysts within the financial and e-commerce industry waited with bated breath for Amazon to announce their first-quarter earnings. Forecasts and projections were made before the announcement, leaving them waiting for the numbers to be released. On Thursday, April 25, Amazon reported their highly anticipated first-quarter earnings of 2019. The company beat the estimates made by analysts, setting a record for quarterly earnings and doubling their first-quarter profit from the previous year. While Amazon experienced less growth in its revenue, they did experience wider profit margins.
Leading up to the Q1 announcement, analysts projected that Amazon’s revenue for this quarter would be $59.69 billion. However, Amazon came out on top with $59.7 billion in revenue. In addition to this, the predictions made by analysts were set at about 4.67 earnings per share. The company’s actual final numbers sat at $7.09 for earnings per share, making it 50% higher than analysts at Wall Street were expecting them to reach. These numbers were an increase from last year’s revenue of $51 billion and $3.27 per share.
Despite the company’s slow earnings, investors are seeing more profitability from Amazon. Amazon’s net income for the quarter reached $3.6 billion, a profit of $4.4 billion with record margins at 7.4%. This set an entirely new record for the company. This growth in business and increase in margins is widely attributed to their online services, cloud, advertising, and third-party seller services. While the total sales are smaller, the company’s profits are bigger.
While their overall Q1 news was good for Amazon, their revenue overtime has slowed. Its total revenue grew 16.9% compared to the period last year. This is the slowest expansion the company has seen since its Q1 earnings in 2015. Its revenue in North America reached $35.81 billion, an increase of 17% compared to last year’s 46% growth. The company’s international growth reached $16.19 billion, dropping to 9% from last year’s 34% growth rate.
With this news, the company did warn that their numbers for the second quarter may not be as exciting, saying it could “fall shy of analyst’s estimates.” Analysts projected revenue of $62.39 billion for Amazon’s Q2. However, Amazon provided a midpoint range of $1.2 billion for its second-quarter profit, which sits below analyst’s expectations. The company expects a growth between 13% and 20%, between $59.5 billion and $63.5 billion in revenue.
Citing the Q1 news, Amazon is one of the best performing big technology stocks of 2019 so far, with a 28% increase in its stock this year. This makes it the third most valuable company in the world, sitting behind Microsoft and Apple.
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