Amazon's profit surpasses $2bn after boost from cloud and Prime

Alexa will be integrated into LG's next smart fridge

Wall Street had projected $2.49 a share, but those numbers might not be comparable; Amazon posted a per-share profit of $0.40 in the second quarter past year. It's the company's third straight quarter of posting more than $1 billion in net profit.

Despite big retail sales, much of the giant's profits in the second quarter of the year came from its Amazon Web Services division.

The stock rally pushed Amazon's market value to just $70 million shy of $1 trillion, the highest value any public company has ever achieved.

While revenue missed Wall Street expectations, the earnings show Amazon is managing to keep a lid on expenses while investing heavily in new devices and businesses like selling groceries and prescription drugs. Although Amazon Fashion sold $15 billion in gross merchandise volume in 2017, UBS estimates GMV could grow to $40 billion in GMV in 2022, occupying around 32% of the total North America market for online apparel sales. Second-quarter operating expenses rose 34 per cent to US$49.9 billion.

Inc. on Thursday reported a record profit and forecast plowing past analyst estimates, strutting how its lucrative cloud computing and advertising businesses were helping it overcome the high costs of retail.

Highly profitable ad sales were another bright spot in the three months to June.

Amazon stock ticked up 3% in after hours trading.

The company's "other" category, said to consist "primarily" of advertising services hit almost $2.2 billion in sales for the quarter, up 132% from the same period a year prior.

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Sales skyrocketed for Amazon year over year from $38 billion to $52.9 billion, with a 37% increase after subtracting a favorable impact from foreign-exchange rates in the latest quarter.

In his statement on the results, Amazon founder and chief executive Jeff Bezos chose to focus on the success of the company's virtual assistant, Alexa.

The company said it now expects third-quarter sales of between US$54 billion and US$57.5 billion, up from US$43.7 billion a year earlier. Shares had slumped by 3 percent during the regular session, a move some attributed to investor caution toward high-flying technology companies after Facebook warned that its growth was slowing.

Shoppers purchaed more than five million toys, beauty products, PCs, apparel items and kitchen products.

For UK customers, Amazon Prime costs £79 a year or £7.99 per month.

Apparel, in particular, could prove to be a major growth area for Amazon over the medium-to-long term.

While cloud rivals are gaining ground, AWS remains far in front with 31 percent of the fast-expanding market, versus 18 percent for Microsoft Corp and 8 percent for Google in the second quarter, research firm Canalys said Thursday.

During this year's Prime Day, Amazon said the July event saw Prime members purchase more than 100 million products.

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