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Amazon.com Announces Second Quarter Sales Up 20%
- rednerrus 7y agoWhat a life, sales are up 20% and there are frowns all around...
- TAForObvReasons 7y agoObviously not literally what happened, but selling a dollar for 90 cents would help boost the sales figures but hurt the bottom line. Sales alone doesn't tell the whole story.
- vernie 7y agoLOL so just forget any changes to inventory commingling and counterfeit merchandise.
- kuzko_topia 7y agoWell, the blind eye they seem to turn towards this seem to be rather unimpactful for their bottom line I guess...
- mruts 7y agoWhy would you think that your comment is relevant to their sales going up 20%? Maybe they would have gone up more if they didn't have a counterfeiting problem, or maybe they would have gone up less, I dunno. But fundamentally sales going up has nothing to do with counterfeit goods.
- gringoDan 7y ago$14B in goodwill! Crazy.
- kgwgk 7y agoMostly ($9bn) from the $13bn acquisition of WholeFoods.
- mruts 7y agoThat doesn't sound super unreasonable to me. Imagine if Amazon suddenly was a different company with a different name, holding everything else the same. How would this affect cashflows and sales? The difference in sales between this hypothetical company and Amazon is essentially what goodwill is. $14B sounds okay when you think about it like this.
- kgwgk 7y agoNo, that’s not what $14bn of goodwill in Amazon’s balance sheet are.
- mediaman 7y agoGoodwill is the accounting balance recorded when a company buys another company for more than the value of its assets. If you have $1bn in assets, and you sell to my company for $2bn, $1bn is recorded as the assets bought and the other $1bn has to be recorded somewhere - and that somewhere is 'goodwill.' Later, if the acquisition turns out to have been a bad idea, and what I bought from you was worth only $1.2bn, I will record an $800mm 'goodwill impairment' that would be a loss on my income statement and 80% of that goodwill would no longer be recorded as an asset.
- anbop 7y agoAnd “assets” as accountants define them are an almost useless metric for knowledge-based companies.
- carlsborg 7y agoTwo interesting points: 1) Close to 70% of Amazon operating income once again can be attributed to AWS. Consolidated operating income: $3,084 m AWS operating income: $2,121 m 2) AWS revenue was $8.3B for the quarter, 37% more than the same quarter last year.
- ajross 7y agoWhat's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B, literally 30x higher. AWS is a tiny drop in the bucket, no matter what the profit details say. Which then prompts the question of why AWS gets that kind of margin, when it would seem like a pretty commoditized field at this point. Linux VMs are an open and very portable deployment platform. You can get them from any number of top tier providers and a huge horde of little ones. You'd expect to see a ton of competition driving prices down, but we don't. I genuinely don't know why.
- spenczar5 7y agoI don’t think it’s commoditized. AWS has moved past being just EC2. Virtualization is a small piece or the picture, and building and operating DynamoDB or S3 or SQS are all very tough tasks.
- Willson50 7y agoStock is down 3% after hours.
- grecy 7y agoBut they still need tax breaks if you want them to build in your city!
- fooey 7y agoOf course they don't need it, but if states are willing to bribe them billions of dollars, they're happy to run up a bidding war.
- canada_dry 7y agoTo put this in some global perspective... Alibaba's one day sales event "Singles Day" last November grossed almost half that amount (i.e. $30B). Note: Alibaba's operating margins are approx. 30%.
- robryan 7y agoI assume a lot of that Alibaba volume is them collecting smaller commission amounts on a larger number of transactions? Would be interesting to know what the gross profit margin is on their revenue figure for the day.
- adventured 7y agoAlibaba is an advertising platform. They're not a retailer like Amazon. The one day sales event is gross merchandise volume, not Alibaba's actual revenue. The parent comment is comparing apples and oranges. eBay for example did $94b in gross merchandise volume in 2018, their revenue was $10.7b.
- justicezyx 7y agoTheir model is different though. Alibaba has almost no self held sales. While Amzn only include profit from 3rd party as revenue, not sales from 3rd party (AFAIK).
- endorphone 7y agoYet Alibaba's revenue for all of 2018 was $55B USD, compared to $232B USD for Amazon. I see that one day sale thing appear in many mentions of Amazon and it might be a little...misleading.
- canada_dry 7y agoYet Alibaba's operating margins are 15X (31% vs 2%) that of Amazon.
- scarface74 7y agoRevenue is nothing but bragging rights. Profit is what matters.
- sharkweek 7y agoProof I have no idea how the stock market works: “Wow, that’s insane, their stock must have popped back over 2k because of this news!” checks ticker “Down 2.5% after hours...?”
- mythz 7y agoAs always, it's due to the results being below Wall St estimates that are already priced into the stock which is still trading at an insanely expensive 100 P/E ratio.
- brlewis 7y agoPrice/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.
- mythz 7y agoThey're not a Startup, they've been "going for growth" for a 1/4 of a century, eventually you need to make a profit to justify your Market Cap. Just because profit isn't a goal for AMZN doesn't mean it's not a vital financial metric.
- brlewis 7y agoYou've presented a concise and valid set of statements that argue that a 100 P/E ratio might be expensive, but don't justify calling it insanely expensive.
- djakjxnanjak 7y agoRevenue is up 20% year over year. The growth is real, not just a goal.
- mythz 7y agoOnly 20% is why the stock is down after hours, at 100 P/E AMZN is speculatively priced where they're expected to achieve infinite growth until they deliver financials that justify their valuation which Investors are betting on to happen before they hit any growth ceiling. There's also no room for an economy downturn which expensive stocks like AMZN are extremely volatile to.
- dfps 7y agoDoes anyone feel lile commenting on why stock price fell after this?
- vitaflo 7y agoBecause earnings came in below forecast.
- mruts 7y agoWhy would you expect it to go up? The market was already pricing in the expected sales and clearly the number in the spreadsheets before the second quarter report was higher than the real actualized value that was released.
- adventured 7y agoEffectively zero net income or operating income growth ($2.6b vs $2.5b; and $3.1b vs $3.0b), despite 20% sales growth. The market generally dislikes it when margins contract. Plus, AWS growth dropped to 37% from 49%, year over year. I consider that a great number given their size is approaching that of Oracle. However, every headline likes to hang on the persistent decline in AWS growth. It's a very large part of what's propping up the enormous AMZN valuation. As goes AWS, so goes the AMZN stock.
- newsreview1 7y agoHow would it be, to be able to self declare something like "prime day" and make more than black Friday sales?
- vikramkr 7y agoThey actually missed wall street expectations on profit, this isn't a victorious quarter for then.
- deleted 7y ago[deleted]