Amazon’s financial report and forecast demonstrates the company’s strength

Amazon shares rose after the company reported first-quarter results that exceeded analysts’ expectations. Amazon’s total revenues are up 44%. The company said it will hold its Prime Day sale in June, which sets a good head start for the second quarter.

Amazon (AMZN) released its first quarter results last week, with strong digital commerce and cloud sales and digital ad revenue.

Amazon shares rallied on the back of approving estimates from Wall Street analysts, who raised their price targets following the company’s report.

Amazon’s total revenues for the first three months of 2021 were $ 108.52 billion, up 44% from a year ago and well above the analyst average of $ 104.47 billion.

Most of Amazon’s sales growth came from the international segment, with overseas revenues up 60% and North American revenues up 40%.

Quarterly earnings rose to $ 15.79 per share, easily surpassing the expected $ 9.54 earnings per share. Amazon’s quarterly earnings and earnings statistics for the last 2 years are available here.

Amazon Web Services, the global leader in cloud computing, grew 32% revenue in the first quarter to $ 13.5 billion.

Amazon’s Other revenue, which experts say comes primarily from digital ad sales, grew 77% year-over-year to $ 6.9 billion.

Amazon CEO Jeff Bezos celebrated the success of Prime Video’s video streaming service, where users get a subscription by paying $ 119 for a Prime Club membership with access to free two-day delivery of online orders. The company now has 200 million Prime subscribers, up 50 million from early 2020.

Amazon’s revenue from physical stores, including Whole Foods Market, Amazon Go and others, continued to fall, with sales falling 16% to $ 3.9 billion. Online delivery is not included in this category, Olsavsky said.

Amazon forecast for the second quarter of 2021

Amazon executives predict current quarter revenues of $ 110 billion to $ 116 billion, higher than Wall Street’s forecast of $ 108.6 billion.

The company said Prime Day, the largest sale on Amazon’s site, will take place in June this year. This should be a significant positive for the company’s revenues and earnings in the second quarter.

Amazon CFO Brian Olsavsky said the company decided to experiment with a different time frame and change the traditional two-day sale time from July to June, as “July is vacation month for many.”

The company also noted that it expects cost reductions related to the COVID-19 pandemic, but at the same time, Amazon’s employee costs will rise, as pay increases are planned for this spring.

Amazon said last week that it will spend over $ 1 billion to raise wages for more than half a million of its U.S. workers.

BMO analyst Daniel Salmon and Susquehanna analyst Shyam Patil called Amazon’s first quarter “impressive” and raised their target prices for the company’s stock to $ 4,300 and $ 5,500, respectively, seeing prospects for continued strong sales this year.

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