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Amazon earnings reveal big sales, accomplishments across business lines

Amazon had a good second quarter, and leaders said it proved once again the retailer’s motto of great prices, shopping convenience and putting the customer first is reaping big rewards.

July 23, 2015 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com

If Jet, the self-described second coming of mega etailer giant Amazon, had a dream of success when opening its virtual doors this week, the 20-year-old Amazon may have just made that the impossible dream with its second quarter 2015 financial results.

Amazon's sales were up 20 percent, hitting about $23.18 billion — representing a 27-percent spike compared to the second quarter 2014, and operating cash flow zoomed up 69 percent compared to a year ago. Net income was $92 million compared with the net loss of $126 million a year ago.

Simply, Amazon had a pretty darn good second quarter and leaders said it proved once again the retailer’s motto of offering consumers great prices and shopping convenience and putting the customer first is reaping big rewards during the quarterly earnings call at close of market Thursday.

“It was a strong quarter,” said Phil Hardin, director, investor relations, adding the figures represent strong usage growth, and reveals success in Amazon’s international expansions across 11 regions.

CEO and Founder Jeff Bezos, who launched Amazon in his garage in 1985, did not speak during the call. In a press statement he said Amazon’s team has been working hard for customers, noting several business initiatives accomplished during the quarter: Amazon Business, debut of Amazon Mexico, Prime free same-day, the opening of its ninth Prime Now city, 11 Emmy nominations for Transparent,  six new kids pilots, Echo and its voice assistant Alexas hit general availability, 350 significant Amazon Web Services features and services as well as agreements for new solar and wind farms.

While the financials were cause enough to celebrate it was clear Hardin and CFO Brian Olsavsky, both who spoke during the one-hour earnings call, are still excited regarding the outcome of Amazon’s first-ever ‘Prime Day’ event held last week.

The global shopping event gave Amazon’s Prime members (who pay a set subscription fee for free delivery and services for the year) more deals than on a Black Friday, and customers bought more units on Prime Day than last year’s Black Friday event.

Amazon also said more new members tried Prime worldwide on Prime day than in any day of the company’s history.

“It was Christmas in July,” said Olsavsky. “It was a strong quarter,” said Hardin in response to analyst inquiries regarding Amazon consumer activity.

“We were thrilled with the results, sold more nationally than any other day and it was great for sellers too,” Olsavsky said.

Sellers using Fulfillment by Amazon also benefited, experiencing record-breaking unit sales on Prime Day. During the quarter Amazon also introduced yet another new e-reader, the Kindle Paperwhite, boasting twice the pixels and a new font.

During the call niether Hardin nor Olesekay made mention of Amazon’s first-ever smartphone, the Fire Phone, which didn’t quite catch fire with even longtime Amazon fans. The lack of attention was noted by one analyst during the question and answer portion of the earnings call.

In response Olsavsky said it’s long been Amazon’s stance not to discuss product road maps.

There also wasn’t any mention during the call of Amazon’s Fire HD or Fire TV product lines, although the release noted that the Fire HD Kids edition tablet was now in the U.K. and German markets, and Amazon Fire TV now offers nearly 2,000 channels, apps, and games.

The Amazon leaders, asked about future use of current robotics in warehouses, said they had no new numbers but are “Super excited about warehouse cos savings,” and said productivity goals are focused on getting inventory closer to the customer.

Amazon, as well as analysts, did mention Amazon’s plans for India and the fact it’s the etailer’s faster-growing geography in sales and that Amazon now represents India’s biggest online store with over 25 million products.

“When we see positive surprise we just double down on it. We are super excited about India and the ramp up in investment will continue,” said Olsavsky.

There was also substantial questions regarding Amazon’s Web Services (AWS), given robust growth and even Amazon’s increasing internal use of the service. Amazon, as usual, did not choose to disclose many specifics about AWS.

Amazon’s move into India as well as Prime Day’s notable accomplishment are the main factors for Amazon’s optimism heading into the third quarter. The company expects net sales to grow between 13 percent and 24 percent, compared to third quarter of 2014, with sales hitting between $23.3 billion and $25.5 billion.

About Judy Mottl

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Judy Mottl is editor of Retail Customer Experience and Digital Signage Today. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.

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