Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Apr 28 2016 16:23:09

Amazon Grows Sales 28 Percent in First Quarter

By: Ina Steiner

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Amazon's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing first quarter 2016 earnings, you can view the full release with tables on Amazon's investor relations website.

Amazon.com, Inc. today announced financial results for its first quarter ended March 31, 2016.

Operating cash flow increased 44% to $11.3 billion for the trailing twelve months, compared with $7.8 billion for the trailing twelve months ended March 31, 2015. Free cash flow increased to $6.4 billion for the trailing twelve months, compared with $3.2 billion for the trailing twelve months ended March 31, 2015. Free cash flow less lease principal repayments increased to $3.5 billion for the trailing twelve months, compared with $1.5 billion for the trailing twelve months ended March 31, 2015. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $1.6 billion for the trailing twelve months, compared with an outflow of $1.2 billion for the trailing twelve months ended March 31, 2015.

Common shares outstanding plus shares underlying stock-based awards totaled 490 million on March 31, 2016, compared with 483 million one year ago.

Net sales increased 28% to $29.1 billion in the first quarter, compared with $22.7 billion in first quarter 2015. Excluding the $210 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29% compared to first quarter 2015.

Operating income was $1.1 billion in the first quarter, compared with $255 million in first quarter 2015.

Net income was $513 million in the first quarter, or $1.07 per diluted share, compared with net loss of $57 million, or $0.12 per diluted share, in first quarter 2015.

“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts. We’re building premium products at non-premium prices, and we’re thrilled so many customers are responding to our approach.”

Highlights

Amazon introduced Kindle Oasis, the thinnest and lightest Kindle, crafted from the ground up for readers with an all-new, incredibly thin and light design, plus an included charging cover that delivers months of battery life. Kindle Oasis, our eighth generation of Kindle, weighs just 4.6 ounces and is only 3.4 mm at its thinnest point — 30% thinner and over 20% lighter than any other Kindle.

Amazon announced two Alexa-enabled devices: Amazon Echo Dot, a hands-free, voice-controlled device that uses the same far-field voice recognition as Amazon Echo — for less than $90; and Amazon Tap, an Alexa-enabled portable Bluetooth and Wi-Fi speaker for under $130.

Amazon announced that Spotify Premium is now available in the U.S. on Echo. Spotify subscribers can listen to their music on Echo and ask Alexa to play any playlist, artist, genre, and more from Spotify’s catalog.

Alexa added hundreds of new skills, which include requesting a car from Uber, ordering a pizza from Domino’s, checking your credit balance with Capital One, getting fitness information from Fitbit, receiving election updates from NBC News, and many more. Alexa also supports more smart home devices, including thermostats from Nest, ecobee, Insteon, and Honeywell so customers can control the temperature in their homes using only their voice.

Amazon Dash Button has more than tripled the lineup of available brands. Customers can now choose from over 100 Dash Buttons, including Brawny, Doritos, Energizer, Honest Kids, Peet’s Coffee, Purina, Red Bull, Seventh Generation, and Starbucks.

Amazon Studios acquired the rights to several high-profile films including Woody Allen’s Café Society, Whit Stillman’s Love & Friendship, and 2016 Sundance Film Festival titles Manchester by the Sea, Gleason, Author: The JT Leroy Story, and Wiener-Dog. Following its theatrical run, each film will become available exclusively to Prime members through Prime Video.

Amazon’s second original live-action kids’ series, Just Add Magic, was the most successful Amazon Original Kids premiere with the most streams and hours in the first weekend.

Prime Music teamed up with Macklemore & Ryan Lewis to live stream their album release concert for This Unruly Mess I’ve Made. The live stream was available to all Amazon customers at no cost.

Amazon entered into agreements with Air Transport Services Group (ATSG) to lease 20 air cargo planes to support one and two-day delivery for U.S. customers. ATSG will operate the planes for Amazon.

Prime Free Same-Day Delivery expanded to 11 new metro areas and now serves Prime members in 27 metro areas throughout the U.S.

Amazon launched Prime Belgium with unlimited Free One-Day Shipping on millions of items, unlimited photo storage with Prime Photos, access to more than one million books to borrow with Kindle Owners’ Lending Library, and early access to flash sales.

Amazon was ranked #1 in corporate reputation among the 100 most visible companies in America, according to the 23,000-person Harris Poll. Amazon was also ranked #1 on the Reputation Institute’s U.S. RepTrak 100 list of the most reputable companies, which is based on more than 83,000 ratings.

U.K. consumers ranked Amazon #1 in customer satisfaction in a nationwide poll from the Institute of Customer Service. And for the second year in a row, customers selected Amazon.in as India’s most trusted online shopping brand, according to an annual Trust Research Advisory survey.

The Amazon Global Store on Amazon.cn has grown to over 10 million items, providing Chinese customers with an easier and more convenient shopping experience with authentic products curated from the Amazon.com website.

Amazon.in launched Amazon Tatkal, a studio-on-wheels offering a suite of launch services to sellers, including registration, imaging and cataloging services, and basic seller training. Since launching in February, Amazon Tatkal has reached sellers in 25 cities.

Handmade at Amazon, featuring genuinely handcrafted items sold directly from artisans, has increased selection to nearly 400,000 products from 12,000 artisans in more than 80 countries.
Amazon Home Services, providing customers with a simple way to buy and schedule professional services, now serves more than 40,000 U.S. zip codes with more than 1,200 service options across 45 categories.

Amazon launched the Amazon Payments Partner Program, a global program that offers unique tools and services to help ecommerce service providers and developers integrate their merchant customers with Amazon Payments.

Amazon Business, a B2B offering that includes features and benefits tailored to businesses, now serves more than 300,000 businesses ranging from small to Fortune 500 companies.

Amazon launched Style Code Live, a daily live show dedicated to fashion and beauty that features trends and useful tips from style experts, looks that the audience can shop, and interactive features like live chat. Style Code Live is hosted by Lyndsey Rodrigues, Rachel Smith, and Frankie Grande, and has featured guests such as Meghan Trainor, Karolina Kurkova, Lauren Conrad, Whitney Port, and Molly Sims. The show streams free for all viewers weeknights at 9 p.m. ET/6 p.m. PT at Amazon.com/stylecodelive.

Amazon Education, TenMarks, and a coalition of non-profit education and education technology organizations launched the initiative “With Math I Can” to change student mindsets about math. The campaign challenges more than three million teachers and their students to replace the notion of “I’m not good at math” with “I am working to get better at math.” Teachers and students can visit withmathican.org to learn more.

Amazon Web Services (AWS) announced Amazon Lumberyard, a free, cross-platform, 3D game engine for developers to create the highest-quality games, connect their games to compute and storage of the AWS Cloud, and engage fans on Twitch. Amazon Lumberyard helps developers build beautiful worlds, make realistic characters, and create stunning real-time effects.

AWS announced the general availability of the AWS Database Migration Service, a fully managed service that allows customers to migrate their production Oracle, SQL Server, MySQL, MariaDB, and PostgreSQL databases from on-premises data centers to any of these engines or Amazon Aurora on AWS with virtually no downtime. So far this year, customers used the AWS Database Migration Service to move more than 2,000 databases to the AWS Cloud.

AWS announced the general availability of Amazon Inspector, an automated security assessment service that helps customers improve the security and compliance of their applications deployed on Amazon Elastic Compute Cloud (Amazon EC2).

AWS further enhanced its block storage service, Amazon Elastic Block Store (Amazon EBS), announcing two new low-cost hard disk drive (HDD)-backed storage options that offer customers predictable performance for big data workloads. Amazon EBS Throughput Optimized HDD (st1) and Cold HDD (sc1) volumes deliver consistent baseline performance with the ability to “burst” to higher throughput to meet the performance needs of big data applications like processing streaming data or performing data analytics.

Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of April 28, 2016, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.

Second Quarter 2016 Guidance
Net sales are expected to be between $28.0 billion and $30.5 billion, or to grow between 21% and 32% compared with second quarter 2015.

Operating income is expected to be between $375 million and $975 million, compared with $464 million in second quarter 2015.

This guidance includes approximately $825 million for stock-based compensation and other operating expense (income), net. It assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2:00 p.m. PT/5:00 p.m. ET, and will be available for at least three months at Amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results.

See EcommerceBytes Newsflashfor more information about the earnings call with analysts, where it revealed more about the strain FBA is putting on its warehouses.




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Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: toolguy

Thu Apr 28 16:46:08 2016

Amazon: Net income was $513 million in the first quarter (does not say if it's GAAP or non GAAP)

eBay: non-GAAP net income from continuing operations of $550 million, GAAP net income from continuing operations of $482 million

eBay makes almost the same money as Amazon does and it's only 1/10 the market value of Amazon.

Amazon is so OVERVALUED it's not even funny while eBay is valued at a measly 17 P/E. If Amazon had a 17 P/E the stock price would be less then $20 bucks!

Someday the market will correct this and Amazon will fall like a house of cards!

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: toolguy

Thu Apr 28 16:52:07 2016

I have to admit I hate Amazon as much as most of you hate eBay!

What can I say, I'm an eBay seller, have been for 16 years and proud of it.

I LOVE MY JOB

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

by: pace306 This user has validated their user name.

Thu Apr 28 17:58:40 2016

You're better start selling a lot more used tools, tool.

Amazon sales were up %28 , eBay ??? Maybe 5% and that's with eBay management stealing money from sellers, keeping the USPS increases for themselves and higher fees.

Hate Amazon all you want but THEY know ecommerce......eBay? Not so much!

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: RKTOYS

Thu Apr 28 18:15:04 2016

Don't let your hatred of eBay blind you to Amazon's problems.  There's not a single complaint about eBay that doesn't apply to Amazon too.  High fees?  Higher.  Fees on shipping?  Yep.  Knockoffs in plain view?  You bet.  Manipulated visibility?  Buy box.  Sides with buyers most of the time?  That too.  Competes with sellers?  Directly.

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: toolguy

Thu Apr 28 22:51:28 2016

I found this interesting and so might you:

AWS is also a profit machine: It accounted for 56% of the company's profit this quarter and is the most profitable business at Amazon. As analyst Jan Dawson pointed out on Twitter, AWS generated more operating income in the quarter than Amazon's entire U.S. e-commerce business, with less than one eighth the revenue.

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: Ric

Fri Apr 29 00:46:23 2016

Amazon grew sales 28% YoY, and the disconnected executive leadership at eBay claimed a "solid quarter" as they boasted their paltry 5% YoY growth.

At what point is Wall Street going to wake up and realize that what is holding eBay back is not sellers, not Google, not the hack, but rather, it is grossly incompetent leadership who's only talent is stringing along Wall Street analysts and making fools out of those who believe the corporate drivel.

it is worth repeating.... IF only eBay's BOD tied executive compensation directly to marketplace GMV growth, the result would be explosive increases in sales.  

If the BOD only had the courage to compel executives to focus solely on driving GMV growth, the selfish greed driven executives would be left with no way to enrich themselves unless and until they freed sellers to thrive without all the roadblocks currently holding us back.

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

by: JQ This user has validated their user name.

Fri Apr 29 10:33:02 2016

@RK

Lord knows I am no Amazon cheer-leader. I have been selling on Amazon for over 14 years, six months longer than on eBay, so I have had a lot of experience working with both companies.

Amazon charges crazy high fees and provide completely indifferent customer service to sellers. They has more restrictions than any other marketplace. Their international shipping system for third party sellers is completely inflexible.

All that said, I have a much higher opinion of Amazon than I do of eBay simply because Amazon is stable as a rock and has always provided all sellers with a level selling field. Since items are listed on Amazon under product pages rather than under individual item pages Amazon cannot play with exposure levels. You sell or don't sell on Amazon strictly based under factors that you control - price, quality and service.

For 12 straight years I strongly preferred eBay to Amazon and in 2013 was seriously considering the ideal of shutting down my Amazon shop just to simplify me life by selling only through eBay. A few months later I was very glad I did not take that step. EBay ran out Cassini and started playing with my traffic and suddenly, without explanation or warning, my eBay sales crashed by 40%. Same thing happened again the following year.

Rather than focus my efforts on selling exclusively through eBay I have already downgraded my store there and am in the process of reducing my eBay presence to that of a hobby seller by the end of this year.

Amazon certainly is not a perfect company, but at least I know what to expect there and have never felt abused and screwed over by their management.

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: Philip Cohen
Web Site

Fri Apr 29 10:54:08 2016

Well, there it is, once again, in black and white, what the "smart money" on Wall Street thinks of eBay/PayPal ...

Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
Jul 2015 (post-split): EBAY ~$28; PYPL ~$37; AMZN ~$530;
Currently: EBAY ~$24; PYPL ~$39; AMZN ~$661—LOL

Amazon's share price is up 10%; PayPal is still standing still, and eBay is still effectively going backwards—at a steady rate of knots—and is it any wonder ...

“There are a lot of questions out there and I don’t have any of the answers,”—eBay CEO Devin Wenig, Goldman Sachs Technology And Internet Conference, 10 Feb. 2016.

The eBay executive suite—where the incompetent mingle with the disingenuous, the unscrupulous, the malevolent, the outright criminal, and the just plain stupid. ...

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

by: rhawk This user has validated their user name.

Fri Apr 29 12:12:10 2016

 Well said JQ.

Want to base a business on quicksand?....ebay is the place.

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

by: Troy Stiffler This user has validated their user name.

Fri Apr 29 18:50:54 2016

These #'s are fun.  But they have little impact on my business plan.  Setting up good data, with multi-channel capabilities is what I credit the most.

I see the strangest trends.  Inventory that I've sold 'one a week' on Ebay, I can sell 10 a week on Amazon.  And vice versa.  I sell books for $10 on Ebay that other people sell on Amazon for $.01 + $3.99 shipping.  I get stray sales on Bonanza, when the item is also on Ebay and Amazon.  Why?  I don't know, and don't know that I care to know.  You should have your products out there, everywhere.

It's all so complex that you could go mad trying to see trends.  You could go mad trying to find clear and predictable patterns.

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This user has validated their user name. by: Marie

Fri Apr 29 20:22:52 2016

@pace

Amazon is no angel when it comes to shipping fees.  They still charge a label fee of 7 cents.  Also back on April 10th USPS lowered pricing on media mail, FC and FCP 1-3 oz.  While Ebay recognized the change almost immediately, Amazon is still charging 2.54 for FCP 1-3 oz and it should be 2.45.

When people felt that Ebay was overcharging on FCP, so many people were passionately upset by it and very focal here and elsewhere.  But now it is Amazon doing it and no one here has said a word.

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This user has validated their user name. by: Marie

Fri Apr 29 20:29:08 2016

When comparing the two companies stock prices, as I've said before, you also need to pay attention to how many stocks are issued.

Amazon does not have near as many stocks issued as Ebay.  So comparing the value of one stock between the two companies just does not give you an accurate view.

Amazon has about 470.84M
Ebay has about 1.149B

So Ebay has about 2 1/2 times the number of shares issued.

Certainly that means that Amazon still has a higher stock value than Ebay but not as much as some make it seem when comparing the current stock values.

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This user has validated their user name. by: Philip Cohen
Web Site

Fri Apr 29 21:49:31 2016

@Marie,

Notwithstanding that this matter has been debated and sorted out previously, the ongoing comparison of eBay and Amazon stock prices is a matter of relativity not of capital value ...

It's about "what if" you bought x number of eBay shares, or the same number of Amazon shares, in August 2007, prior to Johnny Ho gaining access to the corner office ...

The fact of the matter is, if you combine current eBay and PayPal ($63), you would be now ~1.6 times better off, if you had bought Amazon you would now be 16.5 times better off—1.6 times compared to 16.5 times; the Amazon share price increase in value has been 10 times that of eBay/PayPal ...

Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
Jul 2015 (post-split): EBAY ~$28; PYPL ~$37; AMZN ~$530;
Currently: EBAY ~$24; PYPL ~$39; AMZN ~$661—LOL

The fact is, PayPal is still standing still, and eBay has for years been effectively going backwards—at a steady rate of knots.

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: toolguy

Sat Apr 30 11:57:11 2016

Philip, do you own Amazon stock?

I would venture to guess you're a millionaire off your investment in Amazon. . .

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

This user has validated their user name. by: Philip Cohen
Web Site

Sat Apr 30 15:34:00 2016

@Tool,

Regrettably, I don't own any Amazon stock; but, I'm certainly thankful that I never bought any eBay stock ...

Otherwise, just adding some facts to the fire ...

The eBay executive suite—where the incompetent mingle with the disingenuous, the unscrupulous, the malevolent, the outright criminal, and the just plain stupid. ...

Perminate Link for Amazon Grows Sales 28 Percent in First Quarter   Amazon Grows Sales 28 Percent in First Quarter

by: Chicago48 This user has validated their user name.

Mon May 2 07:49:20 2016

You guys are comparing apples to oranges. GEez!  AMZ has server/cloud services....AMZ has the Kindle and downloadable streaming movies and music....AMZ has so much more including a space ship, than EB.  If you want to compare EB to someone compare it to Costco or Walmart.  I do wish EB would turn Half.com into a download, streaming service.  It's ripe for it.

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by: Randy This user has validated their user name.

Mon May 2 10:20:15 2016

@JQ
While I was reading your comment, I thought it had been written by ME! Sounds like my story exactly, except I,ve only been on Amazon for 5 years. Until mid 2013 when Cassini dumped my sales by almost half, I never needed Amazon. I had a presence there but concentrated more on eBay. Now though, sales on Amazon easily out pace dBag, oops, I mean eBay.  

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by: Toledo Maude This user has validated their user name.

Mon May 2 12:09:57 2016

Using Marie's total shares issued numbers for eBay and Amazon time's Philip's current stock prices: Amazon gross stock value is 11 times more valuable than eBay's.

EBay is closing in on penny stock status while Amazon's shareholders can look forward to making big profits off of Amazon's share price growth.

I agree with Troy Stiffler, ''what does mean to my business?''

After 15 years of sticking with eBay through ''thick and thin'', my eBay business is more like a hobby with no upside in sight.

Last month my Etsy sales ''beat the pants off'' of eBay, and this month looks to be the same.    

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This user has validated their user name. by: toolguy

Mon May 2 12:24:48 2016

@ Toledo Maude

"EBay is closing in on penny stock status"

Let's hope you know more about internet sales then you do Wall Street because that's the silliest statement made on this board in a long time.

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by: JQ This user has validated their user name.

Mon May 2 20:33:12 2016

@Randy,

I think my experience is pretty much all small seller's experience across the board at eBay over the last couple of years.

I have had this more or less confirmed in a recent conversation with a mid-level member of management. EBay has lost a LOT of small and medium sellers over the last couple of years. But they would rather lose 1000 guys like me than one Diamond account, and so even though eBay knows they are destroying the small  to medium seller base they have no planes to take their foot off the gas pedal regarding Cassini and traffic manipulation policies.

He told me some members of management think things have gone too far, but that is not the majority point of view and that I should not expect anything other than more of the same for the foreseeable future.

He did indicate that he thought Weing was more favorably inclined to small and medium sellers than Donahoe had been. If that is true I sure don't see any actual evidence.

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