Amazon’s quarterly profits rise 12-fold to $2.5bn

Amazon’s profits trounced estimates as the retail giant reported a 12-fold increase in net income of $2.5bn (£1.9bn) for the second quarter.

The results, announced after markets closed on Thursday, marked the first time Amazon’s quarterly profit has broken the $2bn barrier.

Net income rose to $2.53bn (£1.9bn), or $5.07 per share, in the second quarter ending June 30, surging way past the $2.48 per share Wall Street analysts had expected, and up from $197m (£150m), or 40 cents per share, a year earlier.

The online giant saw net sales up 39% to $52.89bn (£40.3bn) from $37.96bn (£29bn) a year earlier, driven by a rise in online shopping and higher demand for its cloud services.

Operating income for Amazon Web Services (AWS) the company’s fast-growing cloud services business, rose 80% to $1.64bn, powering profits for the entire company.

Revenue from AWS surged about 49% to $6.11bn, beating the average estimate of $6bn.

Amazon shares went from falling 2.3% at market opening, and being the second-biggest drag on the Nasdaq and S&P after Facebook lost $120bn in market value, to rising by more than 4% in after-hours trading.

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Amazon has forecast operating income above Wall Street’s expectations for the third quarter, as the company earned far more from its higher-margin cloud business.

The company forecast operating income of between $1.4bn and $2.4bn for the third quarter, beating analysts’ estimates of $843m.