Amazon Eclipses Walmart for Number One: For Now.
Address
410 Terry Avenue North
Seattle, WA 98109-5210
Telephone
206 266-1000
Internet Homepage
www.amazon.com
Total Stores
0; Internet-only Retailer
Trading Area
Worldwide
Total Annual Sales
$88,988,000,000
Senior Executives
Jeffrey P. Bezos- Chairman, CEO, President
Jeffrey M. Blackburn- Senior VP, Business Development
When a retailer which is not Walmart leads the financial morning headlines, that is news. That is want happened the other morning as a result of strong activity in the overnight financial markets during an otherwise quietly traded session.
Shares of Amazon.com rose by more than 14 percent based on a stunning quarterly financials report released the evening before, in which Amazon announced a surprise profit of $92 million. Prior to the announcement analysts had expected Amazon to lose money for its second quarter.
Amazon founder Jeff Bezos, has long been criticized for minimizing the importance of corporate profits, much to Wall Street’s chagrin. Instead he consistently prefers to reinvest revenues back into the company to develop and launch increasingly edgy products and services. These in turn increase revenues which are again redirected to further grow the company.
The sharp overnight increase in the company’s market performance grew Amazon’s market value to more than $250 billion, eclipsing Walmart’s worth of just over $230 billion. During its second quarter Amazon sales rose 20 percent to $28.18 billion. Interestingly, the impressive showing of a quarterly profit doesn’t include Amazon’s July 15th Prime Day, which the company said was a success and had sales outnumbering Black Friday.
Of course, stock prices often reflect speculative values, almost as much as true corporate performance. To be sure Amazon’s seemingly sudden profit is noteworthy. However, a part of Amazon’s stock spurt reflects investor delight at the surprise of a long anticipated profit versus a much anticipated loss.
For years investors have cried in quarterly doses, bemoaning Amazon’s disappointing profitability picture, alongside impressively increasing sales with a growing portfolio of products, services and impressive investments in efficiencies. The latter includes a growing cadre of carefully placed distribution centers with the ever-increasing robotics the company employs to increase distribution capabilities.
One significant part of Amazon’s recent financial success its gradual buildup of cloud computing services, commonly termed Amazon Web Services. After years of developing these offerings, typically of Amazon, this distinct avenue of the company is rapidly growing and is now profitable as well.
