A hike has been seen in the profits of Amazon in the second quarter of the year. Last year company had to face a loss of $126 million but till the second quarter of this year, company’s earning have reached $92 million and sales have increased by 20 percent.
Market share of Amazon also jumped 18 percent regarding market capitalization the company has beaten Walmart which had the worth of $233.5 million at the closing of the market while Amazon has a clear lead having worth of $264 million when the market was closed. Surprising thing is that most of the analysts were expecting that Amazon would have to face the challenge of more loss this year but it all proved wrong and the company has been currently on the way of gains.
Reasons for the Increase in Profits
Amazon is always known for keep its operations hidden that is why still it is not known to anyone that with the help of which products company actually reached that position in profits.
A hint was given by Amazon about the Prime Day which was held during the previous week. Prime was a sales extravaganza for 24 hours. Company told that this would become a source of increase in the number of memberships with the company.
CFO of the company Brian Olsavsky showed the excitement which caused due to the Prime day. According to him the company had never seen such higher rates in which new member had signed up with it.
According to analysts, the cloud business of the Amazon is considered to be the one which would have played a major role in the profit hike for the company. Sales from the Amazon Web services have increased by 81 percent. Sales from the services are almost $1.8 billion and the profit on the other hand has risen up to $391 million. This increase in profits is seen by a surprise percentage of 408.
The interest of analysts and investors is high in this part of the amazon business as the mobile devices and their use has increased over the last decade and developers are going to have a test for the newest apps of the mobile by one of the Amazon Web Services products within hundreds of real phones.
Amazon also had an increase in the sales of another part of the business which is Electronic and General Merchandize Segment which was not expected by anyone but a rise in the profits of this segment is a big source of commerce improvement and growth in the Amazon.