Amazon’s Q1 financials: Phase 2 crushes expectations!

Amazon’s Q1 financials: Phase 2 crushes expectations!

I used to always be able to correct people when they would say that Amazon did something just because they were all about profits…since the e-tailer never used to make any.😉

Well, that’s changed.🙂

Amazon’s latest financial report was a huge improvement.

Here’s the

press release

and here is where you can listen to the

webcast

after doing a free sign-in. By the way, I always put “independent” for my organization.

As has usually been the case, Amazon’s sales are up a nearly incomprehensible amount for a company which is already this big…in this case, 28% to $29.1 billion dollars (comparing 2016 Q1 to 2015 Q1).

Sure, that’s impressive…but investors have been waiting for years for profits.

That’s clearly established now (it had already started).

Let me quote this in a short excerpt:

“Net income was $513 million in the first quarter, or $1.07 per diluted share, compared with net loss of $57 million, or $0.12 per diluted share, in first quarter 2015. “

That’s right…from a $57 million loss to a $513 million dollar gain!

I always say that I’m not good at predicting how investors will react, but I’d be surprised if we don’t see a rise in Amazon’s stock price over the next  couple of days at least.

A lot of things were improved…and I think this is particularly interesting when it’s not necessarily the trend. Apple didn’t have a good report, for example.

I was happy to have them mentioning things I care about as a customer: Prime; the Echo family; Fire tablets; and even a Kindle EBR** (E-Book Reader). That doesn’t always happen.

Some elements of note:

  • More than twice as many Fire tablets were sold  compared to Q1 2015. Certainly, the lowest priced one is part of that, so that doesn’t mean necessarily twice the revenue…but that’s still a lot of growth for one of Amazon’s hardware lines
  • They talked a lot about how effective Prime is, how much they are investing in it…and there was a question that they declined to answer about maybe a new category of benefit for Prime. One possibility to me is gaming…there’s a lot free now, but giving Prime members access (even short-lived) to the more console type games would be big
  • With all of what they’ve done, including the raise in Prime membership fees, Amazon was number 1 in customer satisfaction and in corporate reputation

Now,  I’m just focusing on what we as retail customers see…Amazon Web Services is another big driver of success, as well as third-party sales, and other elements that make Amazon what I call  the “Infrastructure of the Internet”.

As you can see in this

CNN Money graph

at time of writing, Amazon was up nearly 70 points, more than 10% in after hours trading. It will be interesting to see what happens for the rest of the week and beyond.

I’m not concerned that Amazon is going to get complacent soon, incidentally. I think they are reveling in the impact of their innovation and risk-taking.

What do you think? Feel free to tell me and my readers by commenting on this post.

Join thousands of readers and try the free ILMK magazine at Flipboard!

All aboard our new The Measured Circle’s Geek Time Trip at The History Project!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :)

** People who have tried the new Oasis seem to be impressed with the experience. I’m quite disappointed that Amazon as not given people an option to buy it without animal leather being part of the deal. While that’s the case (and I have confirmed with Amazon that it is the case), I, and other people who don’t use leather for philosophical reasons, won’t be purchasing it (I also don’t link to it). I’m sure Amazon will eventually offer us the offer of non-animal leather (or less satisfactorily, without a battery-embedded cover, which would give us less battery life than the Voyage)

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

One Response to “Amazon’s Q1 financials: Phase 2 crushes expectations!”

  1. Edward Boyhan Says:

    Well, this conference call almost sounded like those of other companies. Could Amazon almost be becoming a “normal” company? (:grin)

    Only a couple of things caught my attention. 2016 is a leap year, and so Q1 had an extra shopping day (:D) — this added about 200 basis points to revenue growth.

    The other item had to do with logistics, and Amazon’s leasing some planes, and buying a fleet of trucks. The planes will be used to supplement their normal shippers (UPS, FedEx, etc) during heavy periods.

    They are NOT buying “trucks”, but rather truck trailers. The actual trucking will be contracted out. The trailers will be used to carry already boxed items from distribution centers to sortation centers.

    Sortation centers receive boxed shipments from DC’s in a georgraphic region, and then they are sorted by zip code for delivery — primarily by the USPS.

    In the past year most of my Amazon deliveries have come via USPS (I really like Sunday deliveries :grin). Only larger items come by shippers — in my case almost always UPS — I hardly ever see FedEx anymore.

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