Credit: Shutterstock photoRemember when you used to go to the bookstore as a kid? The smell of all that knowledge, the magazines behind the counter you tried to steal when the clerk wasn't looking, the creepy old guy with the trench coat in the children's section. Back when Barnes and Noble were the baddest brothers on the block, a guy named Jeff Bezos started a website called Amazon.com. Rather than fight your way through the Dewey decimal system and having to talk to the lady with a Master's in Library Science behind the information counter, you could just point and click your way to a copy of "Dating for Dummies" and "Crafting with Cat Hair" without having to change out of your favorite pair of Spiderman pajamas. It was brilliant.
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What started as a bookstore has evolved into so much more. Looking for shoes but too lazy to walk over to Famous Footwear? Zappos.com. Arguing with your friends about how many movies Selena Gomez has been in? IMDB.
Looking for a Halloween costume for Fido? Try Pets.com. He looks so cute in that Ewok costume. Awww. Precious. But selling you things you're too embarrassed to buy in public is only a small part of Amazon's vast empire.
Earnings last night took everyone by surprise when the company announced a profit of 17 cents compared to expectations for a loss of 13 cents. Revenues were up 23% to $25.4 billion, nearly half a billion better than forecasts. They also anticipate a 14% to 25% increase in Q4 revenue. Where's that growth coming from? Another relatively new business, their cloud-computing known as Amazon Web Services generated $2.1 billion during the quarter taking AWS to 78% year over year growth. Great margins too as the division generated $521 million in operating income. Basically, the cloud made the quarter. AWS generated almost as much operating income as Amazon's entire North America e-commerce business.
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The last guy to get this much coin from a cloud was Mario. Amazon's cloud biz is bigger than its four largest competitors combined. Salesforce ( CRM ), Microsoft ( MSFT ), IBM ( IBM ) and Alphabet Google ( GOOG , GOOGL ) are all scrambling to catch up.
Not satisfied will killing the cloud computing game, Amazon is taking aim at Netflix with its Prime Video offering. Amazon is providing original content in addition to offering movies and TV shows we already all know and love. Amazon Studios is the money behind the upcoming controversial Spike Lee Joint Chiraq and the series The Man in the High Castle which is based on the premise that America lost World War II.
Yeah right. Lose a World War. Why not write a movie where the Utah Jazz win NBA titles in the late 90's. 'Murica. Back to Back World War Champions baby. So Amazon Studios is looking for content. Hey Amazon, what about Dave?
Heading into earnings Amazon was a Zacks Rank #2 (Buy). Once the analysts really sink their teeth into the numbers, you can bet they're going to remain bullish on this one. After all, they were off by 30 cents per share this time around. Our Zacks Consensus estimate for the current quarter sits at $1.54. But the Most Accurate Estimate, which is the most recent estimate revision, is all the way up at $2.01. Some very bullish news already.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
