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All Eyes On Amazon Quarterly Earnings

All Eyes On Amazon Quarterly Earnings

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The business and tech world is definitely paying close attention to the earnings reports for the Amazon cloud computing division. These earnings reports will be released Thursday for their AWS division, which offers scalable, inexpensive cloud computer services for businesses.

 

“This should be an exciting quarter because they’ve never broken that out in any detail before, it’s always been estimates,” said Sucharita Mulpuru, an Amazon analyst with Forrester Research.

Part of Amazon’s biggest obstacle is to keep people excited about it as a tech company, “not just a money-losing retailer,” she said.

 

Cloud services are growing at insane rates and Amazon has seen demand for AWS surge. In January the company announced it had over 1 million AWS users.

 

Amazon stock hit a 52-week high this week, at $394.60.

 

Sales for the first three months of the year are expected to rise 14% to $22.4 billion. Amazon’s main profit sources come from its Amazon Prime subscriptions, its marketplace and its cloud computing services.

 

Overall they have seen high sales demand, especially for their electronics. But it’s also been investing large amounts of cash in infrastructure.

 

Good numbers from cloud services would be helpful, as Amazon continues to face pressure to show profits. The company has historically plowed its money back into infrastructure while working in a low-margin field.

 

“There are certain signs that some people are getting a bit restless about allowing that to go on forever,” said David Smith, an Amazon analyst with the Gartner Group in Stamford, Conn.

 

Since cloud computing tends to run at a higher level of profit than retail, the numbers could both calm investors and help give Amazon some breathing room with investors.

Amazon’s IT suppliers competition such as IBM, Microsoft and Google, aren’t seeing high profits from cloud computing.

 

Other areas of interest for Amazon this quarter are the ongoing discussion of possible drone handled deliveries, a greater physical retail presence and possibly the next generation of “Firephone”.