Amazon Primed: ‘Bad’ Q2 Results, Prime Day Data, Environmental Red Flag
30 Jul 2019
‘Amazon Primed’ is a short recap of the larger stories that dominated the headlines this week surrounding everyone’s favourite cardboard abuser, Amazon.
Amazon shares dipped 3.5% despite decent numbers for Q2. With no Prime Day numbers included, sales have risen +20% to +$63 billion in three months. Profits however did not meet expectations, hence the plunge. Despite an increase of 4%, the figure was just shy of Wall Street’s desired figure and hence the dip. Overall, Amazon’s not been helped – media-wise – by a couple of big scandals and Google outperforming expectations (+$31 billion, up 19% yoy) sending shares up 7%. After a dodgy set of Q1 results, Google is once again showing its might, resilience and ability to make a buck on less than Amazon. Proving there’s still plenty to love about Google and they aren’t giving up and inch without a fight. The reason for the jump? Likely to be connected to Google tripling their quarterly profits to $9.9 billion plus no major scandals of late. Investors like that sort of math and record.
Goldman Sachs’ Analyst, Heath Terry, asked about AWS’s volume, a core factor of Amazon’s profits. While AWS posted impressive numbers the division still missed estimates. Brian T. Olsavsky, Amazon’s Senior Vice President and Chief Financial Officer, replied:
I would say that on a percentage growth basis — again on a dollar basis, it’s growing very strongly — on a percentage growth basis we are lapping some very strong growth in the first half of last year. We were growing about 50% in the first half of last year and there are some particular unique customer volumes that were flowing through that some customers had really high usage tied to their businesses. But for the most part, we continue to grow usage and our expansion of our services with all of our customers. So, very happy.
Hitwise has more data and pontifications about Prime Day before we know more. “They’re in a different strategic position in each market – from sheer dominance in the US, growing presence in the UK, to market entry mode in Australia. Initial Hitwise figures, including visits, transactions, sign-ups, and buyers, show that each market is responding positively to these flash sales and promotions.”
A handy chart is here for PowerPoint fodder.
Amazon has bought +2,200 new vans according to Spartan Motors, the supplier, and CNET. Nothing particularly thrilling unless you think about the footprint these vehicles will have and the choices Amazon could have made if it really cares about the planet and wants to reach its green targets it set out recently. Not a mention of the environmental impact these have when it could have been a good PR win for both companies but especially Amazon:
The new order specifies for a minimum of 2,237 walk-in vans to be built during the second half of 2019 at Utilimaster’s Bristol, Indiana, flexible manufacturing facility. Utilimaster’s proprietary walk-in van design is optimized for the customer’s last mile delivery requirements and further advances the breadth of their product portfolio. Prior to this expansion order, Utilimaster exclusively produced cargo van upfit orders for the customer.
By Paul Armstrong