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A better than expected Q2 financial report has made Amazon shares bolster by 9.8 per cent on Friday, which in turn made the company overtake its main rival in retailing, Wal-Mart, in market value. The company ended Friday trading at $563.00 per share, which means its stocks are 85 per cent up for the year.
The Q2 report saw North American sales of the company rise by an astounding 25 per cent compared to the previous quarter, generating $13.8 billion in revenue during the analyzed period. This was driven mostly by strong sales in electronics and general merchandise. Amazon Web Services Division has seen a massive rise in popularity for its services and web-based applications, registering an 81 per cent in revenue since the last fiscal quarter, netting the company $1.8 billion.
Amazon also had a $0.19 earnings per share average during this fiscal quarter, amounting to a total of $23.18 billion worldwide revenue. This beat analyst estimates by a large margin, as the company was predicted to lose $0.15 per share during Q2. The company has now reached a market value of $259.1 billion, making it the most valuable retailer in the world. Previous holder of the title and main rival Wal-Mart, is worth $233.52 billion in market cap.
Amazon’s chief financial officer Brian Olsavsky has acknowledge the strong quarter during an investor meeting, while also pointing out several key moments which helped its cause: the launch of its Amazon Mexico platform, the inclusion of free same-day delivery for Amazon Prime subscribers and the launch of over 300 Amazon Web Services features which made online integration all around the world easier. Prime Day, a new Black Friday-like event directed towards its premium subscribers, also brought in record earnings.
This was a bright spot in an otherwise bleak week for U.S. stock trading, as the top three market averages all registered drops between 2 and 3 per cent. The drops are attributed to multiple factors, including a seven-year low in new home sales, lower than expected quarterly profits for some companies, and a decrease in Chinese manufacturing which raised investor skepticism in terms of global market. The most notorious example was Apple, whose 39 per cent increase in quarterly profits was below the expectation of many analysts, driving its shares down 4 per cent on Friday. Other companies who reached or beat profit predictions were reportedly lacking in strong revenue and growth indicators.
Image Source: Bloomberg
