Amazon posts record profit in last quarter of 2017 | News | DW | 02.02.2018
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Amazon posts record profit in last quarter of 2017

The world's largest online retailer recorded a near $2-billion profit in the fourth quarter. Strong sales for its Alexa, Prime and Cloud services as well as its Whole Foods chain drove the record result.

Amazon.com reported a net profit of $1.9 billion (€1.52 billion) in the last three months of 2017, the largest in its 23-year history, beating investors' expectations.

"This was another blow-out quarter for Amazon," GBH Insights analyst Daniel Ives said.

"The retail strength was eye-popping as the company had a banner holiday season and looked to capture roughly 50 percent of all e-commerce holiday season sales [in the US]."

Highlights:

-    Overall revenue rose by 38 percent to $60.5 billion in the fourth quarter, the biggest increase during a holiday season since 2009.

-    Roughly 70 percent of the revenue came from online sales of its products, with its Alexa voice assistant, as well as its Prime member service boosting sales.

-    Amazon Web Services (AWS), which includes Cloud and other data services, rang in a 45-percent rise in sales to $5.1 billion despite strong competition from the likes of Microsoft.

-    Revenue from third-party merchants rose 41 percent to $10.5 billion during the fourth quarter.

-    Price cuts boosted sales at Whole Foods, which Amazon bought last year.

-    Investments in robotics to make its warehouses more efficient also paid off.

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Alexa and the future

Amazon, which began as an online bookstore in 1995, sets great store in its AI voice assistant Alexa, whose sales have "far exceeded" the company's own projections, according to CEO Jeff Bezos.

"We don't see positive surprises of this magnitude very often - expect us to double down," said Bezos, adding that the company plans to find new uses for Alexa, such as in cars, fridges and alarm clocks.

Amazon looks beyond online retail

The Seattle-based company does not see itself as merely an online retailer anymore. As well as opening physical stores worldwide and acquiring the While Foods chain, Bezos also has plans to cut healthcare costs for employees by joining forces with JPMorganChase and Berkshire Hathaway.

The company said it also plans to spend more on video content by producing more of its own shows.

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ng/kms (Reuters, AP)

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