Five Key Takeaways From Amazon.com, Inc. (AMZN)’s Conference Call


Amazon.com, Inc. (NASDAQ:AMZN) delivered quarterly numbers that pleasantly surprised everyone concerned, be it analysts or investors. The stock, which languished last year, had frenzied activities in the extended hours of trading on Thursday. The stock increased more than 17%, which was good enough to surpass the market cap of Wal-Mart Stores, Inc. (NYSE:WMT).

The company posted an unexpected profit but more importantly grew  Operating cash flow 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 also increased to $4.37 billion for the trailing twelve months, compared with $1.04 billion for the trailing twelve months ended June 30, 2014.

Amazon Web Services

In response to a question from Citi investment research, Amazon.com, Inc. (NASDAQ:AMZN) indicated that it continued to invest in AWS infrastructure and will open its operations in India next year. The Online retailer said that it unveiled AWS Education, which is a free program to help educators, as well as, students to bring real-world cloud technology to the classroom for cloud workforce.

AWS  struck a deal separately to help construct, as well as, operate Amazon Solar Farm in the United States East, as well as, Amazon Wind Farm US East. The two were predicted to generate about 170,000 MWh of solar power apart from 670,000 MWh of wind energy on a yearly basis.

Growing Household Budget

The second one was in respect of the growing household budgets. The company’s SVP and CFO, Brian Olsavsky, said that it was yet to crack apparel specifically. However, he said that he was excited on the business prospects. It was growing very well and believes that it was a big business in North America, as well as, globally. He was also happy about the performance of its consumables, as well as, hard line categories.

International Acceleration

The third factor was that Amazon.com, Inc. (NASDAQ:AMZN) witnessed good acceleration in North America and International markets in the second quarter. While North America witnessed two percentage points growth sequentially, international growth was higher by eight percentage points. Half of them were due to the Japanese consumption tax impact.

Aside from that, Prime Membership continued to see solid growth prospects. Outside the US, it was growing much quicker. He said that the company would add benefits to Prime and additional selection in the Prime flywheel.

Fulfillment Centers

The online retailer updated their fulfillment centers and closed the last year with 109 fulfillment centers and 19 sort centers in the United States. Though the company declined to provide as how many they would close the current year with, its CFO said that its team was looking and working hard on it. He indicated that the retailer was continuing to create the fulfillment centers as per the demand.

The fifth takeaway was in respect of India. Amazon.com, Inc. (NASDAQ:AMZN)’s CFO said both China and India were different totally. He said that the company was doubling based on the success it was able to achieve till now. The region presents immense opportunity to expand and the company will keep investing in it.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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