Amazon has done well for the second quarter of 2017, with sales actually going up. However, while sales have been up, its profits have gone down.

That is because Amazon has largely been on an expansion campaign recently, acquiring new assets to further expand into new territories.

Amazon Q2 Results

Overall revenue for Amazon Q2 has been at $38 billion, a 25 percent increase on the same time last year. While that overall revenue has gone up, it also posted a 77 percent drop in its quarterly income.

It might even be looking at a $400 million loss for the current quarter. This is not surprising though, as much of its revenue has been directed towards its expansion goals.

The reasons for the losses

Recently Amazon has entered the Middle East market and is looking to enter Southeast Asia as well as Australia.

This expansion drive would absolutely need capital, so it is pumping those expansions up with the revenue it has made. The loss is sure to be temporary, as Amazon hopes to turn its latest acquisitions into profit soon.

Amazon has also invested in new technologies as well as new products. It is looking at how to decrease shipping time to customers.

Its video content is being made available for its Amazon Prime members. Amazon Prime would be big, as it is estimated that as much as 50 percent of U.S. households will have Amazon Prime by the end of 2017.

Amazon Prime logo

Revenues from Amazon Web Services have gone up as well. It took in $4.1 billion or an increase of 42 percent.

It is also expected to expand into such areas such as France, Sweden and China. Amazon will continue to grow as its expansion drive continues as well.

Profit might be down momentarily, but it is expected to get back up once its new acquisitions and expansion has come into place and start delivering.

I actually recorded a video on this topic over on YouTube which you can see here:

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *