Amazon reports a winning quarter: net sales climb 20%, net income of $92M vs loss last year
Online retailer still shy about its Kindle device sales, and guidance is wide and ranges from big losses to a net profit, but investors drive the stock up on the earnings report
The online retail giant Amazon reported Q2 earnings after the bell this afternoon, with observers looking to see if the company could swing towards the black.
The answer was yes.
Amazon revenue grew to $23.2 billion, with net income coming in at $92 million in the second quarter, compared with net loss of $126 million in second quarter 2014. That obviously delighted investors who drove the stock up almost 15 percent at one point in after-hours trading.
Amazon’s quarter in the black should quiet some in the investment community, though the company’s third quarter guidance still allows for large losses, though they also say they could post a profit (expect the profit).
As usual, Amazon included a long list of accomplishments in their earnings statement, which you can see below, but again fails to give much detail concerning actual sales of its tablets and eReaders, simply mentioning the new Kindle Paperwhite.
Here is the earnings statement:
SEATTLE, Wash. – July 23, 2015 — Amazon.com, Inc. today announced financial results for its second quarter ended June 30, 2015.
Operating cash flow increased 69% to $8.98 billion for the trailing twelve months, compared with $5.33 billion for the trailing twelve months ended June 30, 2014. Free cash flow increased to $4.37 billion for the trailing twelve months, compared with $1.04 billion for the trailing twelve months ended June 30, 2014.
Common shares outstanding plus shares underlying stock-based awards totaled 488 million on June 30, 2015, compared with 480 million one year ago.
Net sales increased 20% to $23.18 billion in the second quarter, compared with $19.34 billion in second quarter 2014. Excluding the $1.39 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 27% compared to second quarter 2014.
Operating income was $464 million in the second quarter, compared with operating loss of $15 million in second quarter 2014.
Net income was $92 million in the second quarter, or $0.19 per diluted share, compared with net loss of $126 million, or $0.27 per diluted share, in second quarter 2014.
“The teams at Amazon have been working hard for customers,” said Jeff Bezos, founder and CEO of Amazon.com. “We unveiled Amazon Business, opened Amazon Mexico, launched Prime free same-day, rolled out our ninth Prime Now city, broke our Black Friday record with the first-ever Prime Day, received 11 Emmy nominations for Transparent, debuted six new kids pilots, brought Echo to general availability, introduced the Alexa Skills Kit and Alexa Voice Service, opened FBA Small and Light, continued to double down on our fastest growing geography — India, launched 350 significant AWS features and services so far this year (ahead of last year’s pace), introduced AWS Educate, and entered into agreements for new solar and wind farms — enough to exceed our 2016 goal of 40% renewable energy.”
- Amazon celebrated Prime Day on July 15th, a global shopping event that offered Prime members more deals than Black Friday. More new members tried Prime worldwide than any single day in Amazon history. Customers purchased more units on Prime Day than Black Friday 2014, and saved millions of dollars on deals around the world. Sellers using Fulfillment by Amazon (FBA) also benefited, experiencing record-breaking unit sales on Prime Day.
- Amazon launched Prime free same-day delivery in 14 U.S. metro areas, serving more than 500 cities and towns. Prime members can choose from over one million items and order as late as noon to receive their order on the same day, for free.
- Prime Now expanded to three additional cities including London, the first international location to offer the service. Prime Now is available in nine cities, bringing Prime members one-hour delivery on thousands of daily essentials.
- Amazon Echo, the first device designed entirely around your voice, moved to general availability in the U.S. Customer response to Echo has been overwhelmingly positive with over 14,000 5-star reviews and an average customer rating of 4.5 stars.
- Amazon announced the Alexa Fund — named for Alexa, the cloud-based voice service that powers Echo — which will invest up to $100 million to support developers, manufacturers, and start-ups of all sizes to create new experiences designed around the human voice.
- Amazon opened the Alexa Voice Service to third-party hardware makers, giving them the tools to integrate Alexa into internet-connected devices.
- Amazon introduced the Alexa Skills Kit, a free SDK that makes it fast and easy for developers to create new voice-driven capabilities for Alexa.
- Amazon introduced the new Kindle Paperwhite with twice the pixels of the previous Paperwhite, the exclusive Bookerly font, and a new typesetting engine for more beautiful pages.
- Amazon announced the expansion of the Fire HD Kids Edition tablet to the U.K. and Germany. Fire HD Kids Edition is the first tablet built from the ground up for kids, and comes with a two-year worry-free guarantee and access to thousands of kid-friendly books, videos, educational apps, and games.
- Amazon Fire TV now offers nearly 2,000 channels, apps, and games. Popular new additions include STARZ Play, Candy Crush Saga, and Popcornflix.
- Amazon Original Series Transparent is the most nominated Comedy Series at this year’s Emmys with 11 nominations, including Outstanding Comedy Series and Lead Actor, Comedy (Jeffrey Tambor).
- Amazon Original Series Tumble Leaf won five Daytime Emmy Awards, including Outstanding Preschool Children’s Animated Program.
- Amazon Studios launched six new pilots for kids and debuted a second season of Annedroids on Prime Instant Video.
- Amazon announced Amazon Business, a new business-to-business marketplace that offers hundreds of millions of products.
- Amazon introduced the FBA Small and Light program, a new fulfillment solution for fast-moving, small, and light products that increases free shipping selection for customers and provides a low-cost shipping option for sellers.
- The Council of Fashion Designers of America held the inaugural showcase for American men’s fashion, New York Fashion Week: Men’s, which was presented by Amazon Fashion, East Dane, and MyHabit.
- Amazon announced the launch of its Mexico physical goods store, Amazon.com.mx, with the largest selection in Mexico and more categories, items, and features than any previous Amazon launch anywhere in the world. Amazon also launched Selling on Amazon and FBA in Mexico, allowing third-party sellers to list and sell their products at Amazon.com.mx.
- Amazon announced the Global Selling Program for sellers in India, which enables them to access hundreds of millions of customers around the world.
- Amazon.in introduced Sunday delivery across 100 cities in India for all FBA products at no additional cost.
Amazon India continues to be Amazon’s fastest growing geography in sales, and India’s largest online store with over 25 million products.
- Amazon Prime members in Italy now receive free one-day shipping on more than one million items with their Prime subscription.
- Amazon hosted its first-ever “Amazon Academy” in Berlin. Over 250 sellers, software developers, and authors from across Germany gathered to share their experiences and ideas on how to build thriving businesses and careers with Amazon’s platforms. Additional Amazon Academy events are scheduled for this fall across Europe.
- Amazon has tripled the selection available on the Amazon Global Store on Amazon.cn, allowing Chinese customers to choose from three million products curated from the U.S. Amazon website.
- Amazon Web Services (AWS) announced that it will open a new region in India in 2016, which will enable customers to run workloads in India and serve Indian end-users with even better latency.
AWS announced that the EU (Frankfurt) region, which opened in October 2014, is AWS’ fastest growing international region to date.
- AWS announced AWS Educate, a free program that helps educators and students use real-world cloud technology in the classroom to prepare students for the cloud workforce.
- AWS entered into separate agreements to support the construction and operation of Amazon Solar Farm U.S. East and Amazon Wind Farm U.S. East. These are expected to generate approximately 170,000 megawatt hours (MWh) of solar power and 670,000 MWh of wind energy on an annual basis. The energy generated from these facilities will be delivered into the electrical grids that power both current and future AWS data centers.
- AWS announced Amazon API Gateway, a new fully managed service that makes it easy for AWS customers to create, publish, maintain, monitor, and secure APIs at any scale.
- AWS Device Farm is a new service that helps mobile app developers quickly and securely test their apps on smartphones, tablets, and other devices to improve the quality of their Android and Fire OS apps.
The following forward-looking statements reflect Amazon.com’s expectations as of July 23, 2015, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.