Technology

Amazon smashes expectations by tripling profits in Q1

Amazon (AMZN) more than tripled its net profit to $ 8.1 billion for the January-March period, a sign that the appetite for online commerce is not waning as some countries, including the United States , are gradually emerging from the pandemic.

The American tech giant also far exceeded market expectations with revenue of $ 108.5 billion, higher than its own forecasts and up 44% year-on-year, when the company had already recorded strong growth in the first quarter of 2020.

Its title appreciated by 4% during electronic trading after the close of the New York Stock Exchange.

“This is an acceleration from the growth of all of last year, and another indication that Amazon’s boost in business in 2020 shows no signs of waning,” commented Nicole Perrin, analyst at the firm. eMarketer.

The Seattle group’s growth is driven by sales on its e-commerce platform, particularly in North America, but also by business services that use its marketplace ($ 24 billion, + 64%) and by advertising revenue ($ 7 billion, + 77%).

“The volume of distribution through digital channels continues to increase and will therefore support advertising spending even more in the future,” added Nicole Perrin.

In mid-April, Amazon announced that it has more than 200 million subscribers worldwide to its Prime service, which provides access to free and fast delivery and streaming platforms.

The formula costs a dozen dollars a month and was adopted by some 50 million people during the year of the health crisis, a sign of the accelerated transition to online shopping.

Investors are watching for signs of a slowdown in this transition, but they won’t find them at Amazon.

The group expects a turnover of between 110 and 116 billion dollars for the current quarter, or 24 to 30% more over one year, if the “Prime Day”, its day of sales, is well between April and June.

In 2020, Amazon generated more than $ 500 billion in online sales, 45% more than in 2019, according to eMarketer.

In 2021, growth is expected to return to usual rates of around 15%. According to this scenario, the platform holds 11.7% of the global e-commerce market.

AWS, its cloud computing division (remote computing), is no exception, with sales of 13.5 billion in the first quarter, up 32% year on year.

E-commerce and cloud computing are two digital sectors that have exploded during the pandemic, thanks to travel restrictions. The giants of Silicon Valley (Google, Apple and Facebook) all posted sky-high quarterly results this week.

.

Back to top button