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Bezos bags bonkers bucks as almighty AWS astounds again

Cloudy with a chance of windfalls

Amazon Web Services (AWS) is on a roll after closing a financial quarter in which its operating income more than doubled.

Amazon as a whole posted a solid quarter, with net sales of $30.4bn, up from $23.1bn, and net income of $857m, up from $92m. Much of that was due to the success of the cloud computing business.

For the Q2 2016 period ended June 30:

  • AWS net sales of $2.88bn were a 58 per cent increase on the year ago quarter's $1.8bn.
  • AWS operating income of $718m was up 135 per cent over $305m in Q2 2015.
  • AWS operating expenses of $2bn was up 41 per cent over $1.4bn in W2 2015.
  • Amazon's total earnings per share of $1.78 was well ahead of analyst estimates of $1.11.

With AWS more than doubling its year-ago operating income, the Amazon Cloud arm looks to show no signs of letting up, much to the chagrin of competitors such as Google and Microsoft.

"Amazon's latest earnings report included some excellent news for AWS, including significant year-over-year and quarter-over-quarter increases in net sales and operating income," said Charles King, principal analyst with Pund-IT.

"In addition, Amazon reported steady improvements in AWS operating margins. In other words, at the same time that AWS sales are continually improving, the organization is becoming more efficient and profitable."

Among the recent moves made by Amazon was an expansion of its business in India. The opening of a new Mumbai data center not only helped ease network congestion for AWS customers in the Asia region, but it also added the option of data that is stored locally, a big selling point for businesses in India.

"When we expand geographically, existing customers will run more of their workloads on AWS," explained Amazon CFO Brian Olsavsky. "We also open up to new customers when we add these regions."

Amazon shares were up two per cent in after-hours trading to $768. ®

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