Amazon Surprises Investors With A Gift Of Profit

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It looks like the holidays were good to Amazon this year. The company posted a $214 million profit on revenue of almost $30 billion.

The company on Thursday reported a profit of $214 million, or 45 cents a share, on revenue of $29.33 billion, exceeding some analysts' estimates of 17 cents a share on $29.68 billion in revenue. The results show that Amazon learned from the mistakes it made last year when its delivery partners FedEx and UPS ended up with a backlog of packages that caused some shipments to arrive at customers' doorsteps after Christmas.
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Isn't that kinda low, that is less than 1% profit.
 
Zepher said:
Isn't that kinda low, that is less than 1% profit.
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That is a level of profit consistent with being a retailer ... Walmart has hundreds of billions in revenue but their profit is in the 2% range. If Amazon could up to a 2-5% profit they would be world class in the retail arena.
 
A lot of that was probably gift cards. I gave my sisters $100 gift card for Amazon each, and my older sister and parents gave me similar. (Christmas really is all about the kids in my family, so we adults don't usually put too much thought into gifts for each other.) It's likely those profits won't be as high in the following quarter due to people redeeming their gift cards.
 
dgingeri said:
A lot of that was probably gift cards. I gave my sisters $100 gift card for Amazon each, and my older sister and parents gave me similar. (Christmas really is all about the kids in my family, so we adults don't usually put too much thought into gifts for each other.) It's likely those profits won't be as high in the following quarter due to people redeeming their gift cards.
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I am not an accountant, but I know things like gift cards fall into a different category as they are considered a liability.
 
kbrickley said:
That is a level of profit consistent with being a retailer ... Walmart has hundreds of billions in revenue but their profit is in the 2% range. If Amazon could up to a 2-5% profit they would be world class in the retail arena.
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Walmart is making about 4 billion a quarter though, so compared to 214 million, yeah, they've got a long way before they become as profitable as Walmart.
 
heatlesssun said:
Walmart is making about 4 billion a quarter though, so compared to 214 million, yeah, they've got a long way before they become as profitable as Walmart.
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Which is slightly less than 4% profit for them ... as I said, profits in the 2-5% range are world class for a large retailer (which is essentially what Amazon is trying to become) ... a retailer will have severe problems making Intel, or Microsoft, or Apple profits ... it is good to see Amazon finally be profitable since they they usually run in the red
 
Zepher said:
Isn't that kinda low, that is less than 1% profit.
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I came here to ask that as well, 0.7% profit is, ...
How on earth do they not improve on that?

The reasons I buy there are price, plenty of user product feedback and aftercare.
I feel safe with them.
On occasion the prices suck badly so its wise to check, but its mostly good.

Perhaps they are first looking to wipe out the serious competition and then push for a little more pocket money.
 
I know an easy, non-speculative way they can start to cut visa, mastercard and amex out of the mix.....
 
kbrickley said:
Which is slightly less than 4% profit for them ... as I said, profits in the 2-5% range are world class for a large retailer (which is essentially what Amazon is trying to become) ... a retailer will have severe problems making Intel, or Microsoft, or Apple profits ... it is good to see Amazon finally be profitable since they they usually run in the red
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I agree on the margins but still Amazon just isn't in the same league as Walmart when it comes to overall profitability. It seems like they are trying to grow revenue and profits buy doing a little bit of everything which I don't think will serve them well in the long run unless they just hit the jackpot on one of these trial-and-error projects. Which I guess is their plan for now.
 
Yeah, if you ran a business and were filling out your Schedule C reporting a $200 profit on $30,000 in sales .... would you consider it a success? Or perhaps you should just go ...

GET A JOB
 
If I was running a business and had money left over to reinvest in the company after paying everybody, myself included, then yeah I would consider that a success.
 
aeonrevolution said:
If I was running a business and had money left over to reinvest in the company after paying everybody, myself included, then yeah I would consider that a success.
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That's how business usually works. We've gotten too used to a system full of leeches where you can make 50%+ margins just moving other people's money around and adding no value.
 
xX_Jack_Carver_Xx said:
Yeah, if you ran a business and were filling out your Schedule C reporting a $200 profit on $30,000 in sales .... would you consider it a success? Or perhaps you should just go ...

GET A JOB
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Unfortunately, modern retail sales operations often operate on extremely slim margins. You have to crank up the volume to make any money. An established player like Wal Mart can pump out a lot of volume, so even if they're only making 2.5% profit overall, they're making that 2.5% on a lot of gross sales.
 
A lot of their prices have gone up and new products are not as cheap as you would expect from Amazon.'

But shh.. They know Prime members won't look around first.
 
See... conversations like this start to piss me off... I hate the stock market, they I play their game.. Not every company can always be growing, that's ridiculous. Once you become a large retailer you already have most of the customer base you can get. However stock holders still demand growth, so thats when companies try to increase profit by cutting back!
I DONT WANT THAT! Newegg was a great company like an awesome mom and pop store down the road. Then it was bought out and turned into a bottom line business so to hell with customer support and quality shipping... Just pisses me off that that is what people want capitalist america to turn into for their check books. Its fine in most cases. Just not all
 
Staples said:
A lot of their prices have gone up and new products are not as cheap as you would expect from Amazon.'

But shh.. They know Prime members won't look around first.
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The competitive landscape of online retail has changed dramatically over the last few years. So many places to buy with competitive prices and if you live in a larger area with lots of brick and mortar stores many of those places have adapted to the online economy and a very price competitive with online shops.

I've been a Prime member for about four years now. I'm happy with it overall but I almost never just buy from Amazon without spending at least a few minutes doing price comparisons. I agree that Amazon pricing doesn't seem a low as it used to be but they still usually have it at a good price in my experience. But I do order a lot more from different e-tailers than I used to.
 
I'll say it again. Amazon makes no "profit" because they are continuously investing their money back into the company. Amazon is constantly trying new things, and for a retailer, it has a huge presence in digital stuffs. Apparently they are also trying to impact the product distribution and delivery level too. Check out Amazon Supply too.
 
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