Amazon.com Inc posted a profit that was double Wall Street targets, thanks to the retailer’s younger, higher-earning businesses, including cloud computing and advertising. The report was a relief to investors in the U.S. technology sector.
Amazon’s report shows how the world’s largest online retailer has increasingly learned to compensate for the high costs of fast package delivery and video streaming by controlling expenses and building up higher-profit businesses. It was the first mover in the business of selling data storage and computing power in the cloud, a bet that continues to reap rewards and give it the leeway to invest in grand projects.
For instance, the company is working to ship food from Whole Foods Market stores across the United States, in an ambitious attempt to bring groceries into the age of online retail.
Amazon’s spending typically climbs in the summer quarter, pressuring pro.ts as the company prepares for Christmas and the winter holidays, its peak sales period each year.
Yet the company said it expects an operating profit between $1.4 billion and $2.4 billion, up from $347 million a year earlier. The company also reported a second-quarter profit of $2.5 billion, its largest ever.