Amazon stocks soared to an all-time high today, putting investors who kept the faith with CEO Jeff Bezos in a good mood around the globe. The highs came as Amazon (AMZN) reported absolutely fantastic first quarter results.
Amazon’s first-quarter report revealed that the company has more than doubled its profits in the first quarter of 2018 from the same period in 2018. The news comes as a welcome surprise to investors, many of whom were concerned that repeated attack from President Trump, who has been railing about Amazon and the US Postal Service, might hurt the company’s bottom line.
It looks as those fears were completely unfounded though as Amazon raked in more than $1.6 billion in profit during the first three months of 2018. Analysts had predicted that Amazon’s profit would shrink this year, but thanks to the company’s cloud computing services, Amazon Web Services, things keep looking up for the company.
The company already has plans to increase profits even more and to offset rising costs by raising the price of Amazon Prime. Prime memberships will go up from $99 to $119 per year starting next month. With over 100 million Prime subscribers, the $20 increase means huge revenue increases for the company. What’s more, Amazon Web Services now has a $20 billion annual revenue run rate according to a letter released by Bezos.
Consumers are happy with Amazon as well it seems, with the company ranked number one in both the American Customer Satisfaction Index and the United Kingdom Customer Satisfaction Index. What’s more, Amazon came in number on LinkedIn’s 2018 Top Companies list which ranks the most sought after places to work for professionals in the United States.
“We’ve had some successes over the years in our quest to meet the high expectations of customers. We’ve also had billions of dollars’ worth of failures along the way,” said Bezos in a letter to shareholders. “The high standards our leaders strive for have served us well…I’m extremely proud to share some of the milestones we hit last year, each of which represents the fruition of many years of collective effort. We take none of them for granted.”
Among the milestones that Bezos is most proud of are the increase in Prime membership, and the customer embrace of Alexa. According to Amazon, Alexa-enabled devices are among the best-selling items on the site. Another feather in Bezos’ cap is the acquisition of Whole Foods.
“When we closed our acquisition of Whole Foods Market last year, we announced our commitment to making high-quality, natural and organic food available for everyone, then immediately lowered prices on a selection of best-selling grocery staples, including avocados, organic brown eggs, and responsibly-farmed salmon. We followed this with a second round of price reductions in November, and our Prime member exclusive promotion broke Whole Foods’ all-time record for turkeys sold during the Thanksgiving season,” writes Bezos.
“In February," he continued, "we introduced free two-hour delivery on orders over $35 for Prime members in select cities, followed by additional cities in March and April, and plan continued expansion across the U.S. throughout this year. We also expanded the benefits of the Amazon Prime Rewards Visa Card, enabling Prime members to get 5% back when shopping at Whole Foods Market. Beyond that, customers can purchase Whole Foods’ private label products like 365 Everyday Value on Amazon, purchase Echo and other Amazon devices in over a hundred Whole Foods stores, and pick-up or return Amazon packages at Amazon Lockers in hundreds of Whole Foods stores. We’ve also begun the technical work needed to recognize Prime members at the point of sale and look forward to offering more Prime benefits to Whole Foods shoppers once that work is completed.”
Amazon has been a hot stock for several years, and although there was some concern among analysts that performance would fall off this year, it looks like Bezos has a recipe for success that is going to produce for the foreseeable future.