Once a Money Loser, Amazon Is Now Operating at a Profit
The e-commerce giant was profitable again last quarter.
Once known for its big expenditures and significant losses, Amazon is now on a profitability streak.
The e-commerce giant made $1.78 per share during the second quarter, it announced Thursday. Revenue was up 31 percent to $30.4 billion. Both numbers came in significantly higher than Wall Street was expecting. Analysts polled by Thomson Reuters anticipated earnings of $1.11 per share on revenue of $29.55 billion.
This represented the fifth-straight quarter of profits for Amazon, which operated at a loss or nearly even for years as it built up what is now a formidable e-commerce business.
"It's been a busy few months for Amazon around the world, and particularly in India," CEO Jeff Bezos said in a statement, pointing to the launch of Amazon Web Services and Prime in the region. "The team in India is inventing at a torrid pace, and we're very grateful to our Indian customers for their welcoming response."
Meanwhile, Amazon continues to commit to spending big on original video programming. CFO Brian Olsavsky said that the company will double its content spend in the second half of 2016 compared with the same period last year. He declined to give specifics about how much Amazon is currently spending. Rival Netflix, meanwhile, is spending $6 billion on originals and acquisitions, and content chief Ted Sarandos recently said that number would go up.
Amazon is coming off a successful Prime Day campaign, which was the biggest day ever for the company and its devices. But the 60 percent year-over-year growth in Prime Day sales won't factor into the company's bottom line until it reports third-quarter figures because it fell in July. The company forecast revenue between $31 billion and $33.5 billion for the third quarter.
Amazon remains tight-lipped about the number of people subscribing to its Prime service, which offers free shipping and access to streaming video and music for $99 a year. In fact, the company did not provide any new details about the growth of Prime in its second-quarter earnings release. Olsavsky was asked for more clarity around Prime numbers during a conference call with investors but unsurprisingly declined to provide any updates.
Despite the gains, Amazon shares immediately dropped more than 2 percent during after-hours trading before correcting and shooting up by 3 percent. Amazon shares had closed Thursday up 2 percent, or more than $15, to $752.61.