Amazon (AMZN, Financial), the giant e-retailer, enables sellers to sell their products online and designs its websites to enable millions of products to be sold by the company and by third parties across dozens of product categories. Customers access its websites directly and through its mobile websites and apps. It also manufactures and sells Kindle devices. The company is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire phone, Fire tablets, and Fire TV are some of the products and services pioneered by Amazon.
Amazon offers programs that enable sellers to sell their products on the company’s websites, and fulfil orders through them. Amazon also provides platforms that allow authors, musicians, filmmakers, app developers and others to publish and sell content through the site and cater to a large customer base. . Online commerce has been on the rise because of the convenience, efficiency and relatively low prices offered.
First Quarter Results
Operating Cashflow
Operating cashflows increased by 47% $7.84 billion for the trailing twelve months compared with $5.35 billion for the trailing twelve months ended March 31, 2014. Free cash flow increased to $3.16 billion for the trailing twelve months, compared with $1.49 billion for the trailing twelve months ended March 31, 2014.
Sales
Net sales increased by 15% and stood at $22.72 billion in the first quarter of 2015. Net sales increased by 22% (compared to first quarter of 2014), excluding $1.3 billion unfavorable impact from y-o-y changes in foreign exchange rates throughout the quarter.
Operating Income
Operating income increased 74% to $255 million in the first quarter, compared with operating income of $146 million in first quarter 2014.
Loss
Net loss was $57 million in the first quarter, or $0.12 per diluted share, compared with net income of $108 million, or $0.23 per diluted share, in first quarter 2014.
2015 Guidance (Second Quarter)
- Net sales are expected to be in the range of $20.6 billion and $22.8 billion.
- Operating income (loss) is expected to be between $(500) million and $50 million.
In the News
Amazon recently launched Amazon Home Services, a new marketplace for on-demand professional services. It launched Dash Button, a small button that prime customers can place in their home and use to reorder frequently used household items. Amazon announced new features for Amazon Fire TV and Fire TV Stick, including X-Ray (now available directly on your HDTV), support for a captive portal to connect to Wi-Fi at a hotel or dorm room, and new shortcuts. Amazon Fire TV also added expandable USB storage and private listening with support for Bluetooth headphones. AMZN launched unlimited cloud storage with Amazon Cloud Drive — two new storage plans for customers to securely store new and existing content collections. Amazon.in launched the Amazon Seller App, a best-in-class mobile app for sellers in India, which makes it easy and convenient for sellers to update inventory, source and list new items on Amazon.in, and respond faster to customer queries. (Source: Company’s Website)
Wrapping Up
AMZN is a dynamic company used by a large number of customers throughout the world. Its cost advantages, innovative drive, scale and customer focus have allowed the online retailer to gain participation in different categories in a relatively short period of time. This Seattle-based Fortune 500 company will certainly make headway in the coming years.
The company is very well-positioned in the industry and is here to stay in the long run. The company is growing at a fast pace, and will continue to benefit from its immense scale of operations and will give consumers broad selection, good pricing and convenience. It is slowly working for a better future.
AMZN posted solid first quarter results and is poised to grow in the near future. It has generated incredible revenues in the first quarter. More upside can be expected from this company. It is expected to create shareholder returns. Investors may consider adding this company to their portfolio. The company is a buy since it has immense growth potential and has a lot to offer to its investors.
