Amazon.com Inc on Thursday posted holiday quarter results well above expectation...
) on Thursday posted holiday quarter results well above expectations as the expansion of its one-day shipping program came under budget and membership in its Prime loyalty club notched a 50% rise in two years.
“We’re past the worst in terms of the margin pressure from the one-day shipping initiative,” said Atlantic Equities analyst James Cordwell. That and the “massively overstated” concerns about cloud competition rebutted some of the biggest arguments against buying the stock, he said. Jeff Bezos, Amazon’s chief executive, said in a statement that the world’s biggest online retailer now has more than 150 million paid members in its loyalty club Prime, a 50% increase from its last disclosure in April 2018.
The profit rise reflects the evolving nature of Amazon’s business. The company has been moving away from low-margin retail toward a marketplace model where it takes lucrative fees for shipping and advertising the products of other merchants on its platform. Expenses similarly grew as the company moved inventory closer to customers and built out its last-mile delivery network, which now handles the biggest share of Amazon-ordered packages in the United States. Amazon said worldwide shipping costs rose 43% to $12.9 billion.
“This is important because it ends six quarters of measurable decline in AWS growth, reassuring investors that the segment has signs of stability,” Gene Munster, managing partner at Loup Ventures, said in a research note.
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