Amazon.com, Inc. (AMZN) Revenue Beat Shows Strength In Retail

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Amazon.com, Inc. (AMZN) Revenue Beat Shows Strength In Retail
By Szk7788 (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Amazon.com, Inc. (NASDAQ:AMZN) released its earnings numbers for the three months through March this afternoon after the market closed on Wall Street. The company showed earnings per share of $0.23 for the quarter it records as its first of fiscal 2014. Revenue in the same period came in at $19.74 billion. On today’s market shares in Amazon trended up strongly and finished the day at $337.15.

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In the run-up to the release of this afternoon’s earnings, analysts following Amazon.com, Inc. (NASDAQ:AMZN) were looking for the company to report earnings of 23 cents per share on revenue totaling $19.4 billion. Those forecasts are based on a Businessweek survey of 32 analysts following the company. In the same three months of 2013 Amazon managed to earn 18 cents on revenue of $16.1 billion.

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Amazon silent on revenue diversity

Amazon.com, Inc. (NASDAQ:AMZN) is no longer just a retailer by spending, though most of the company’s revenue still comes from that business. The firm has been spending a serious amount of money in developing its Fire range of devices and its cloud computing platform Amazon Web Services. The latter is the project that investors are really excited about, but the company has been reticent about its development.

There may be a future for Amazon.com Inc. (NASDAQ:AMZN) in cloud computing, and the company’s future may even be dominated by the business in the coming years. Management has not been forthcoming about the details of the project, however, a trend that leaves investors nervous about the state of the business.

Amazon shareholders still struggling to secure profit

A profit is not all that much to expect from a company that brings in $80 billion in revenue every year, but shareholders in Amazon.com, Inc. (NASDAQ:AMZN) are not usually allowed to let desire for profit weigh on the company’s activities. The firm made a small profit last year that leaves its shares valued at more than 500 times most recent earnings. In 2012, the company actually managed to lose money.

Analysts reckon that Amazon.com, Inc. (NASDAQ:AMZN) is going to make a reasonable profit this year, and that the company’s trajectory is only headed upward. That projection has been offered before, however, and Amazon management has a way of making sense of increased investment. Those investments often eat into the company’s profit but increase revenue. Margins are a thing to worry about in the future according to Mr. Bezos.

Amazon.com, Inc. (NASDAQ:AMZN) is one of the most interesting companies on Wall Street if only for its similarity to itself in the days before the dotcom crash. The company’s shares barely hit above $100 back then. Trading at more than $300 today, the company is one of the most highly valued supercaps around. Unfortunately that means more problems for investors as they bear the risk for the company’s behavior.

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