Amazon's Cloud is flying high, but profit disappoints overall

AWS produced $US687 million profit last quarter, a jump of 69 per cent

Profits from Amazon's Cloud division jumped 69 per cent last quarter, but the rest of its business fared less well.

Amazon Web Services generated an operating profit of $US687 million in the three months to December 31, on sales of $US2.4 billion, Amazon said. That was up from $US240 million in profit and sales of $US1.4 billion a year earlier.

Amazon started breaking out its Cloud numbers last year and it's proved to be the most profitable part of its business. Operating margins at AWS were 29 per cent last quarter, compared to 3 per cent for the company as a whole.

But its results overall, including e-commerce sales and movie rentals, fared less well. Total worldwide sales were up 22 per cent to $US35.8 billion, but earnings of $US1 per share were well below the $US1.56 analysts had been expecting, according to a poll by Thomson Reuters.

That pushed Amazon's shares 11 per cent lower in after hours trading, to $US562, wiping out the 9 per cent gain it made during regular trading.

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James Niccolai

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