Last month, Jeff Bezos, the founder and chief executive of Amazon, had a leap of $12 billion in 24 hours in his personal fortune, bringing it to a mind-blowing $134 billion.
Defying analysts’ predictions of a fall in profits due to increased investments, Amazon reported its bottom line had more than doubled in the first quarter of this year. The unexpected result was powered in part by its cloud computing business. Last year saw profits of $1.48 a share, but last month the surprise came as profits hit $3.27 a share. Following the news, in after hours trading, Amazon shares surged by almost 8% and hit a new high.
It was this after hours increase that led to Bezos’ net worth jumping by $12 billion, adding further to the wealth of the world’s richest man. Bezos released a statement to investors praising the Amazon cloud service, AWS, and commending the team involved for their drive. The clients of this arm of the company include Netflix and NASA.
The recent acquisition of Whole Foods by Amazon contributed to overall revenue, which also beat analyst predictions and increased by 43 percent on last year, reaching $51.04 billion. Over the last year, Amazon’s cloud business grew by 49% and the advertising arm had a massive 139% increase. Over the same period, international sales grew by 34%, whilst domestic sales jumped 46%.
Amazon Prime currently has over 100 million subscribers around the world, as Bezos disclosed in a letter to shareholders last month. Subscription revenues for the company have jumped 60% year on year to the current level of $3.1 billion. Amazon’s Chief Financial Officer, Brian Olsavsky, has explained the Prime membership will increase in price to $119 per year from the current $99 for new members from June.
The popular service provides 2 day delivery for millions of items and also allows customers access to the company’s video and music streaming services. This rise in price has been justified by Olsavsky because it will be invested to lower product prices and improve the Prime service, for example by accelerating delivery.
Amazon has, at times, been a controversial company and this reputation shows no sign of abating with the recent attention from President Trump. The company’s e-commerce growth and reach prompted several critical Twitter posts about Amazon from Trump.
He also targeted The Washington Post, which is owned privately by Bezos. Despite there being no evidence, Trump has claimed that Amazon has not paid sufficient funds to the US Postal Service to cover their delivery costs. With his distinct lack of evidence, the continuing success of Amazon may be the best possible way to exact revenge on the Trump administration for these veiled threats.
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