Amazon’s revenue sharply increases thanks to cloud computing
Amazon's sales in the fourth quarter of 2017, including sales from the Whole Foods chain, jumped 38% over the same period last year. Revenues in North America increased 42% to $ 37 billion, while revenue from other markets increased 29% to $ 18 billion.
These positive results have helped Amazon's share price rise more than 6%. Its share price was expected to rise more than 70% in 2017 and Amazon has hit $ 700 billion for the first time this week.
In an online conference, CFO Amazon Brian Olsavsky said the number of orders was high at unpreceded level, the store operations efficiency increased during the peak season and the development of the AWS cloud computing service helped the business results in the final quarter of 2017 better than expected. According to Olsavsky, advertising business is a major contributor to Amazon's skyrocketing sales in North America.
Its net profit was $ 1.9 billion, which is twice as high as its full-year profit and highest in its history. Amazon said its fourth-quarter profit benefited nearly $ 789 million from the new tax law that had just been adopted by the end of 2017.
AWS cloud computing continues to be the fastest growing and most profitable business for Amazon. In the previous quarter, sales of this segment increased 45% over the same period, generating $ 1.3 billion profit and accounting for 64% of Amazon's total profits.
In a statement, CEO Jeff Bezos highlighted the success of Alexa's voice-control technology and implied that Amazon would promote its investment in the area. "Our forecasts for Alexa in 2017 are very positive and we are far ahead of them," Bezos said.
Amazon has actively invested in recent quarters, injected money into its data system and warehouses, and enriched the contents of the Prime Video online video service. Accordingly, the company's investments in the fourth quarter 2017 increased 38% over the same period (to $ 58 billion).
Revenues from traditional stores, mostly from the Whole Foods supermarket chain, reached $ 4.5 billion. This is the first full quarter since Amazon bought the food chain and CFO Brian Olsavsky said he was "on cloud nine" with the original results of Whole Foods.
By: Christina Baker