Economy

In 2018, AWS delivered most of Amazon's operating income

In 2018, AWS delivered most of Amazon's operating income”

They still have some breathing room, however, as Facebook this week reported more than $16 billion in ad sales in just the fourth-quarter of previous year, while Google is expected to top $135 billion in ad revenue in 2018 when it reports next week. Amazon's revenue of nearly $72.4 billion in the period also exceeded Street forecasts of $71.7 billion, according to Zacks Investment Research. While Amazon may have slowing growth and may still have traditional valuation metrics that are not easy to justify, many analysts and investors are believers of the long-term opportunity and outright dominance that CEO Jeff Bezos may deliver in the years to come.

Amazon Web Services announced a series of cloud-based innovations, including new purpose-built databases, data lake setup service, reinforced learning and deep learning applications in a recent Amazon Web services media masterclass held at Fairmont Makati, Monday.

Amazon has the same issues as other retailers in that it sees a huge wave of orders during the ever-important holiday season at the end of each year. Net income for the quarter was $3 billion, up from $1.9 billion in the year-ago quarter. Sales for the full year grew 31 percent to $232.9 billion.

In North America, sales increased 18% year-on-year, while its worldwide sales climbed 15%. Amazon stock closed at $1,718 on Thursday, a rise of 18 percent over the last 12 months, and its latest market value of $840.4 billion makes it the most valuable public company in the world.

CBS News' Irina Ivanova and Alain Sherter contributed reporting.

Net income increased to $3.0 billion, or $6.04 per diluted share, compared with net income of $1.9 billion, or $3.75 per diluted share, past year and easily topping Street estimates of $5.65 a share. With Amazon controlling 50 percent of e-commerce purchases in the USA, more sellers have an incentive to fork over money for these ads.

The company said in its earnings report Thursday that sales growth is likely to slow further in the current quarter. AWS accounted for 10 percent of the company's net sales in the quarter, up from 8 percent in the year-earlier period.

Overall, net sales for the fourth quarter were $72.38 billion and beat analysts' average estimate of $71.87 billion on the back of a strong holiday season, which includes the major USA shopping event Black Friday.

"Amazon will now need to work doubly hard to achieve any future sales gains", he said in a research note. If their calls are correct, Amazon's revenue ride might not be over yet.

"That number will move around", Olsavsky said on the earnings call.

Amazon's workforce grew by 48 percent in 2016 and 38 percent in 2017, not including major acquisitions, Olsavsky said. Bezos has been pushing beyond the low-margin business of selling goods online into more profitable categories like cloud computing and advertising.



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