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Amazon Web Services grew by 50%, profit exceeds expectation: Amazon Q2 2018 earnings

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Amazon Inc. reported its Q2 2018 earnings, exceeding Wall Street expectations and posting a profit of $2.5 billion, a 1200% rise from the same quarter last year when the company reported a net income of $197 million. Amazon also reported earnings per share of $5.07, which is more than double of what analysts estimated ($2.50).

Amazon fell just short of revenue expectations by bringing in $52.9 billion instead of the market expectation of $53.41 billion. This is the third consecutive quarter in which Amazon has posted a net income surpassing $1 billion and the first quarter in which it has crossed the $2 billion mark. Shares rose 4.1% in extended trading after the positive earnings call. Amazon’s rapidly growing ad business topped $2 billion in sales for the first time this quarter, a growth of 132% percent year-on-year.

Amazon Web Services grew almost 50%

Amazon Web Services grew by almost 50% with sales at $6.1 billion as compared to $4.1 billion in the same quarter last year and $5.4 billion in the previous quarter. In its international segment, Amazon’s net sales grew to $14.6 million as compared to $11.4 million year-on-year but fell 18% from the end of FY 2017. Loss in international segment shrank by 30% year-on-year to $494 million.

AWS is perhaps the highlight of this quarter’s earnings call — it has an operating margin over 25 percent compared to its tiny margins on retail. AWS business is its biggest contributor to its actual net income.

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