Amazon.com Earnings Miss -
AWS Revenue Up 42%
July 28, 2017
Amazon.com reported financial
results for its second quarter ended June 30, 2017.
Operating cash flow increased 37% to $17.9 billion for the
trailing twelve months, compared with $13.0 billion for the
trailing twelve months ended June 30, 2016. Free cash flow
increased to $9.7 billion for the trailing twelve months,
compared with $7.7 billion for the trailing twelve months ended
June 30, 2016.
Free cash flow less lease principal repayments
increased to $5.5 billion for the trailing twelve months,
compared with $4.2 billion for the trailing twelve months ended
June 30, 2016. Free cash flow less finance lease principal
repayments and assets acquired under capital leases decreased to
$1.5 billion for the trailing twelve months, compared with $2.9
billion for the trailing twelve months ended June 30, 2016.
Common shares outstanding plus shares underlying stock-based
awards totaled 502 million on June 30, 2017, compared with 495
million one year ago.
Net sales increased 25% to $38.0 billion in the second quarter,
compared with $30.4 billion in second quarter 2016. Excluding
the $502 million unfavorable impact from year-over-year changes
in foreign exchange rates throughout the quarter, net sales
increased 26% compared with second quarter 2016.
Wall Street was looking for
net sales of $37.2 billion. AWS had revenue growth of 42
Operating income decreased 51% to $628 million in the second
quarter, compared with operating income of $1.3 billion in
second quarter 2016.
Net income was $197 million in the second quarter, or $0.40 per
diluted share, compared with net income of $857 million, or
$1.78 per diluted share, in second quarter 2016.
But, investors were expecting $1.42 per diluted share in earnings.
“Our teams remain heads-down and focused on customers,” said
Jeff Bezos, Amazon founder and CEO. “In the last few months, we
launched Echo Show (our newest Echo device with a video screen),
introduced calling and messaging via Alexa on all Echo devices,
debuted Inside Edge on Prime Video (the first of 18 Indian
Original Series), introduced Amazon Channels in both the U.K.
and Germany, launched four new Fire tablets, expanded Amazon
Fresh to Germany, launched Prime Now in Singapore, launched our
25th airplane with Prime Air, hired more than 30,000 new
employees, opened three new Amazon Books stores, launched more
than 400 significant AWS features and services, migrated more
than 7,000 databases using AWS Database Migration Service, and
held our third annual Prime Day — signing up more Prime members
than ever before. It’s energizing to invent on behalf of
customers, and we continue to see many high-quality
opportunities to invest.”
Quarter 2017 Guidance
Net sales are
expected to be between $39.25 billion and $41.75 billion,
or to grow between 20% and 28% compared with third quarter 2016.
This guidance anticipates an unfavorable impact of approximately
$125 million or 40 basis points from foreign exchange
(loss) is expected to be between $(400) million and $300
million, compared with $575 million in
third quarter 2016.
This guidance assumes, among other things, that
no additional business acquisitions, investments,
restructurings, or legal settlements are concluded.