Amazon files a rare quarterly profit as AWS revenues jump 81 per cent

Amazon celebrates 20th birthday by making a profit

Amazon, the online bookseller turned global emporium, has filed a rare profit in its second quarter results as Amazon Web Services (AWS) saw revenues increase by 81 per cent.

Sales increased from $1bn in the second quarter in 2014 to $1.8bn in the three months to the end of June this year. Operating income increased from $77m to $391m. AWS is now the fastest growing segment of the Amazon behemoth. Surprisingly, perhaps, activist investors like Carl Icahn have yet to pop up to suggest that AWS should be floated off from the main company.

Overall, Amazon achieved a net income of $92m on revenues of $23.2bn, up from $19.34bn in the same quarter in 2014. If sales continue increasing at the current trend, Amazon may well crack $100bn in global annual sales this year. The company also turned around a net loss of $126m last year into a profit of $92m this year.

The making of an unexpected quarterly profit briefly pushed the company's stock price above that of Wal-Mart, the world's biggest retailer. However, Amazon finished the day with a market capitalisation of $224.6bn compared to Wal-Mart's $233.5bn.

For the future, Amazon is focusing on India, not just in the core Amazon retail business, which ought to bypass India's rigid and expensive traditional distribution systems, but also for AWS with the opening of a new region in India to serve Indian customers more efficiently. India, of course, is a major centre of IT outsourcing, although Amazon's Frankfurt region is the fastest growing for the company at the moment.

Other AWS initiatives in the quarter include the Amazon API Gateway, a fully managed service intended to make it easy for AWS customers to create, publish, maintain, monitor and secure APIs at any scale; and AWS Device Farm, a new service to help mobile app developers quickly and securely test their apps on mobile devices.