John123
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John123 in Gainers & Losers,

Amazon tops Wall Street targets, lifted by cloud revenue

Amazon.com Inc (AMZN) posted strong results across its older and newer businesses on Thursday as global Web retail sales and cloud services topped Wall Street targets and the world's largest online merchant forecast revenue would outpace expectations in the current quarter as well.

The Seattle-based company is riding a wave of retail sales moving to the internet, and its Netflix-like video streaming is bringing new customers to its subscription Prime service, which in turn drives customers to spend more on Amazon. The cloud unit, Amazon Web Services, is the company's fastest-growing business and is regarded by analysts as the next driver of growth for the company.

Shares rose 2% after hours, in line to open on Friday at a record high. Forbes calculated this week that Chief Executive Jeff Bezos had surpassed Warren Buffett to become the world's third-richest person.

It earned $857 million in the second quarter, or $1.78 per share, compared with analysts' average estimate of $1.11 per share, according to Thomson Reuters.

Lower September-quarter income is routine for Amazon as it ramps up for the end-of-year holiday shopping season, Chief Financial Officer Brian Olsavsky said on a call with media.

“We’re adding warehouses. We’re adding workers,” he said, noting 18 new fulfillment centers for the third quarter, compared with six centers in the same period of 2015.

Amazon's work force expanded by 47% in the second quarter year-over-year, including part-time employees.

Costs will also rise as Amazon doubles spending on video content in the second half of the year versus the same period a year ago, aiming to attract consumers to its Prime subscription packages, Olsavsky said. At the same time, Web Services profit margins improved due to greater efficiency, he said.

Amazon forecast current-quarter net sales of between $31.0 billion and $33.5 billion, factoring in sales from its Prime Day annual shopping festival. Wall Street on average had targeted $31.6 billion, according to Thomson Reuters.

The company's net sales in North America, its biggest market, jumped 28.1% to $17.67 billion.

Revenue from Amazon Web Services surged 58.2% to $2.89 billion. This beat the average estimate of $2.83 billion, according to market research firm FactSet StreetAccount.

Amazon stock rose to $766.50 in after-hours trade on Thursday compared with a close of $752.61.

This is really very good numbers. I will keep AMZN in my portfolio, may be even add some more shares.