On Strong Earnings, Amazon And Whole Foods Face Culture Clash

Whole Foods Helps Boost Amazon Shares Over $1000

Amazon who are now tipping millions moving into new markets including Australia, has seen their shares rise 7% after reporting a 35% lift in United States revenues and a 29% lift in global sales.

Revenue rose 34 per cent to $43.7 billion in the quarter ended September 30.

As usual, the company's profits were relatively small - $256 million, or 52 cents per share, nearly flat with the third quarter of previous year as it ploughed money back into the business. That includes $1.3 billion from Whole Foods. Management had guided for third-quarter operating income to be between a loss of $400 million and a gain of $300 million. Without these sales, revenue increased 29% year over year to $42.4 billion.

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Most American retailers are beside themselves trying to compete against Amazon, but very few have the kind of diverse business units found under its umbrella, which provide significant cushioning. The e-commerce and cloud computing giant crushed Wall Street's expectations and its own guidance across the board.

While there has been a massive rush to create 3rd party skills for the Amazon Echo, most have either been toy applications of extensions of other services, because until recently there was no way for applications to pay for themselves.

He called the growth in service sales along with Amazon's 59% year-over-year growth in subscription services in Q3 a positive, being more predictable sources of revenue. Meanwhile, Amazon's global e-commerce business fared even worse, losing $936 million during the quarter. In the fourth quarter of 2016, Amazon had $43.7 billion worth of sales, meaning that it expects an increase of 28% to 38%. "Customers have purchased tens of millions of Alexa-enabled devices", he said.

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As predicted Microsoft was able to beat their 2015 goal of $20 billion in annualized run rate for the commercial cloud. The company's cloud business accounted $6.9 billion of that, a 14 percent year over year increase.

This is good news given that Amazon just rolled out an array of new Alexa-enabled devices just before the holiday season. Amazon had almost 542,000 employees at the end of last month, about 160,000 more than it had the year before. The move is interesting, as I am sure there are not many people with Amazon Echo products who do not also have Prime.

But Whole Foods Market's integration during the quarter didn't stop the new business from contributing operating income to Amazon's overall business. Given Amazon's appetite for growth - even when it comes at the expense of near-term profitability - it seemed logical that Amazon might spend a significant sum integrating Whole Foods' operations into its business.

Amazon now pays developers out of its own pocket to create the skills, which Echo users are then able to download and install onto their Alexa at no charge.

Walgreens beats profit estimates as mail services provide boost
Relative volume is the comparison of current volume to average volume for the same time of day, and it's displayed as a ratio. Watching the signals on shares of Merlin Entertainments Pl (MERL.L), we note that the PPO is now below the signal line.

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