Amazon earnings fail to meet expectations

By Barry Eitel

SAN FRANCISCO (AA) – Though barely eking out a profit, Amazon said Thursday in its earnings report for the third quarter that its notoriously volatile business model is stabilizing.

The online retailer earned an impressive $32.7 billion in revenue during the quarter, but posted a profit of just $252 million. That failed to meet analysts’ expectations, and its stock price fell more than 6 percent in after-hours trading as the earnings report was released.

Total sales were up 29 percent compared to the same period last year, the company revealed. Although it did not meet investors’ hopes, Amazon’s profit increased significantly compared to 2015. Investors were paid $0.52 per share, while they were only paid $0.17 per share off a profit of $79 million for the third quarter last year.

Since it was founded in the mid-1990s, Amazon has been famous for usually losing money. It appears that pattern is changing, however, and the company’s forays into cloud computing looks to be stabilizing its income. Amazon Web Services (AWS), its cloud-based online platform, earned $3.2 billion during the quarter, $861 million of which was profit. The company said it is the third consecutive quarter AWS earned more than the entire North American retail sales division.

In a statement released with the report, Amazon chief executive Jeff Bezos touted several of the company’s new innovations, like digital assistant Alexa, which is powered by artificial intelligence and utilizes AWS.

“Alexa may be Amazon’s most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting,” Bezos said in a statement. “And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now,” he said.