Jeff Bezos Hails Alexa as Amazon Profits Surge

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Jeff Bezos Hails Alexa as Amazon Profits Surge
Highlights
  • Amazon's profit more than doubled to $1.9 billion in past quarter
  • Company's revenue rose 38 percent from last year to $60.5 billion
  • Shares in Amazon jumped six percent in after-hours trade to $1,474

Amazon on Thursday reported its profits had more than doubled in the past quarter as company founder Jeff Bezos heaped praise on the performance of its Alexa digital assistant.

Net profit more than doubled to $1.9 billion (roughly Rs. 12,100 crores), compared with $749 million (roughly Rs. 4,800 crores) a year earlier, for the US online giant which has expanded from retail to video to cloud computing and other services.

Overall revenues for Amazon rose 38 percent from last year to $60.5 billion (roughly Rs. 3.84 lakh crores).

The growth was even more impressive considering Amazon set aside $789 million (roughly Rs. 5,000 crores) to cover taxes on repatriated earnings, taking advantage of a favourable rate under a new law passed by Congress.

While Amazon offered only limited details on the reasons for growth, Bezos said a big factor was Alexa -- the name given to the artificial intelligence program powering its speakers and adopted by makers of cars, appliances and other connected devices.

"Our 2017 projections for Alexa were very optimistic, and we far exceeded them," Bezos said in a statement.

"We've reached an important point where other companies and developers are accelerating adoption of Alexa," he said.

"There are now over 30,000 skills from outside developers, customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa, and we're seeing strong response to our new far-field voice kit for manufacturers."

Amazon's success in expanding into new sectors and markets has made Bezos the world's richest individual, and the last report suggests growth is accelerating.

Shares in Amazon jumped six percent in after-hours trade to $1,474 (roughly Rs. 95,000).

One of the big profit centres for Amazon has been its cloud computing division called Amazon Web Services.

In the fourth quarter, AWS revenues were up 45 percent to $5.1 billion (roughly Rs. 32,600 crores) and the unit delivered an operating profit of $1.8 billion (roughly Rs. 11,500 crores).

For Amazon's North American operations, following the acquisition of grocery chain Whole Foods, revenues rose 42 percent and the division posted an operating profit of $1.7 billion (roughly Rs.  10,900 crores).

The international operations saw an operating loss of $919 million (roughly Rs.  5,900 crores) on revenues of $18 billion (roughly Rs. 1.15 lakh crores).

Neil Saunders of the research firm GlobalData, said Amazon's growth was impressive -- with revenues up 28 percent without counting Whole Foods.

"Given this is above the trajectory of recent growth, it is safe to say that Amazon shows no signs of slowing down," Saunders said in a note to clients.

"Although Amazon has grown sharply, it is still nowhere near its potential. There are categories, like home and apparel, where it is underpenetrated and with tweaks to its proposition should be able to make further gains. There are markets around the world, like Australia, where Amazon is just getting started and has significant scope to boost sales."

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