Tag Archives: AWS

Fast delivery is very important to some e-commerce Giants

Amazon is expected to report earnings on Thursday 24 after market close, and the consensus EPS forecast for the quarter is $4,46, and that is below the reported earnings for the same quarter last year that came in at $5,75.

I have been watching Amazon for two decades and it`s a big surprice to see that the company is still interesting. The company has been growing since the late 90`s and have now become a huge conglomerate with many businesses on top of its core business.

Amazon increased the shipping cost but what happens when its drones are taking over?

Cloud computing is one of the biggest winners at the conglomerate at the moment, and that`s also one of the biggest reasons why investors are holding their shares. It`s not their e-commerce business I`m looking at right now. It`s simply AWS (Amazon Web Services).

AWS made up about two-thirds of Amazon`s operating income last quarter. 13% of Amazon`s revenue comes from AWS. This is one of the most interesting part of the conglomerate with its great business model.

AWS grew 49% in the same quarter last year, and last quarter AWS reported a 37% growth and that is still a very great number. But it costs. Last quarter, Amazon reported that they had invested heavily in AWS.

Amazon added more personnel to the marketing team as well as the AWS`s technical team. Money makes money, and these investments should pay off in the long run.

Amazon have big competitors out there and one of the biggest are Rakuten in Japan and Alibaba in China. I receive many packages from them all and free and fast delivery is critical important to them all.

Jeff Bezos knows it and that`s why they now are in direct competition with FedEx and UPS to name a few. Amazon have recently started to ship third-party goods through its own logistics system, and that`s probably why FedEx made a decision to cut ties with them. This is probably why FedEx also reported negative results in its recent earnings.

According to Rakuten, Amazon has gone from shipping 15% of its own packages in 2017 to 50% today. Will they continue to ship its own packages through its own logistics system, and what is the percentage?

The shipping cost accelerated and can increase. On top of that Amazon still have its one-day shipping strategy which is a strategy not all of the e-commerce giants can follow up. I receive many packages from Ebay and sometimes it can take weeks and months to see the item arrive. But they have a different strategy.

Investors should look at it in the long run and keep in mind that the shipping cost can drop when the drones are coming to play the game. But it remain to see when that is happening.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Amazon will advertise on Super Bowl

Another Wall Street darling is set to report after the closing bell today. A company we talked about nearly every day in the late 90`s. A company that survived the dot-com bubble. A company that is up 33,000% since then and up about 90% last year.

Amazon has become a big competitor to Wal-Mart and Target and it is expected to see that trend to continue. Amazon Prime`s subscriptions have doubled in two years and they offer users free two-day shipping, cloud storage and streaming.

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The Estimize Mean consensus calls for EPS of $1,64, three cents above the Wall Street estimate. Revenue expectations for $35,9B in-line with the Street`s consensus, and higher than guidance of $35,13B. Sales are expected to rise about 20% YoY.

I expect to hear more about their cloud computing platform which has become a new business segment in the company. Amazon Web Services (AWS), accounts for about 8% of total revenue, and the business is growing.

So are Prime time, which is a strong loyalty program for Amazons customers. They have free shipping and have the ability to stream and listen to  music  in the same package. Its been proved that loyal customers at Amazon Prime shop twice or more per month than non-subscribers.

Amazon said they added 3 million Prime subscribers before christmas day last year, and it isnt slowing. If this continue, Amazon will end up having 50% of all U.S hoseholds subscribed to Prime in 2020, according to Macquarie Research. Thats awesome.

Amazon hired a record 10,000 people in Europe in 2015 which is taking its workforce above 41,000. This will continue, and Amazon is stepping up its investment plans in Europe this year. In 2016, they plan to hire more staff as it seeks to expand amid a stricter scrutiny of its tax, privacy and employment records.

Amazon is also planning to advertise during this years Super Bowl for the first time. An ad by «30 Rock» star <strong>Alec Baldwin</strong> and former National Football League quarterback <strong>Dan Marino</strong>. The ad will highlight Amazons Echo speaker and its voice-activated virtual assistant Alexa. What do you think will happen the day after that ad? The sales will skyrocket.

What`s peculiar about Amazon is the price earnings at 831,80! Wow!

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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