Amazon revenue boost comes at a cost


Amazon has announced its financial results for the third quarter of 2017, with revenues up 34% to $43.7bn. Operating income was down, however, falling by 39.7% to total $347m.

The latter was driven by the company’s core retailing operations, which continue to deliver top-line growth, but are expensive to maintain and develop. Amazon continues to invest substantial funds into its fulfilment operations, and expenditure in this area increased by 48% to $6.4bn in the quarter.

The acquisition of Whole Foods raised the company’s operating income by $21m, whilst adding $1.3bn to net sales.

The company’s North America segment reported net sales of $25.5bn, which represented a year-on-year increase of 34.8%. Operating income contracted by 56%, amounting to $112m.

Meanwhile, Amazon’s International business produced net sales of $13.7bn, following growth of 29.3%. The operating loss in this division widened by 73%, however; falling to -$936m.

Amazon Web Services continued to drive group profitability, producing an operating income of $1.2bn from net sales of $4.6bn. In addition to representing year-on-year growth rates of 36% and 41.9%, respectively, these figures produced a Q3 return on sales of 25.6%. This compares to a return of sales of 0.44% in the North America division, and -6.8% in the International division.

Source: Amazon