Amazon posted a record profit of $3.6 billion for the first quarter of 2019, powered by the rapid growth of its cloud services unit even as overall revenue slowed.
Amazon Blows Past Estimates to Post Record $3.6 Billion Quarterly Profit
Amazon blew clear past analysts expectations with the announcement of a $3.6 billion profit for the first quarter of 2019, powered by the rapid growth of its cloud services unit even as overall revenue growth slowed for the company.
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Total revenue for the company grew 16.9 percent over the first quarter of 2018, marking its slowest growth quarter in four years. North American revenue grew 17 percent while last year’s first quarter growth came in at 46 percent. International growth fell to 9 percent from last year’s first quarter growth of 34 percent.
The growth of Amazon’s advertising unit slowed to 34 percent after five straight quarters of 60 percent growth or higher. It’s brick and mortar stores, like Whole Foods barely grew at all by comparison, increasing just one percent over last year.
Revenue growth for Amazon’s cloud service unit meanwhile remained relatively steady, growing at 41 percent over last year, though this was a dip from last year’s 49 percent growth in the first quarter.
In all, Amazon had a record net profit of $3.6 billion in the first quarter, while having an operating profit of $4.4 billion, a profit margin of 7.4 percent, nearly double last year’s profit margin of 3.8 percent.
The growth in profits were created from the company’s cloud services, advertising, and third-party seller services, which have lower total sales, but much lower costs, making each sale more profitable than a sale in its other businesses, such as Whole Foods. The steady revenue growth of its popular Amazon Web Services cloud service certainly played a part in producing the company’s record-setting quarterly profit.