Amazon Shocks Wall Street With Giant Profits Even As They Raise Prime Rates

Amazon shows no signs of slowing down.  The online behemoth just announced a deal to stream the U.S. National Football League games during the 2018 – 2019 seasons on Amazon’s Prime Video.

Seattle-based Amazon is beating out older retail rivals by delivering products than it takes to buy goods from a Wal-Mart or a Target-like store.  All this at a lower cost to customers.

Amazon said operating profit from this quarter will be between $1.1 billion and $1.9 billion; a year ago it was  $628 million for the same quarter

Amazon’s Chief Executive Jeff Bezos is now the richest person in the world, a fact which hasn’t gone unnoticed by U.S. President Donald Trump.   Trump claims without any evidence that Amazon has not paid their fair share to the U.S. Postal Service to cover delivery costs.

“The significant acceleration in Other revenues suggests Amazon’s advertising ambitions continue to ramp quickly and is now large enough to drive upside in Amazon’s margin profile,” said Baird Equity Research analyst Colin Sebastian.

Amazon Web Services handles computing and data for large companies in the cloud, saw its profit margin expansion in the quarter.

There are now more than 100 million Prime Members globally who spend above average on Amazon.

Amazon continues to invest and disrupt many other areas.  It is trying to get into healthcare by cutting costs for its employees who are in the hundreds of thousands.

The company is expanding its retail reach by focusing more energy on growing India’s marketplace.

 

 

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