E-commerce behemoth Amazon (AMZN - Free Report) just reported its latest quarterly financial results, and despite the company’s ever-tightening grip on the domestic and international retail markets, investors are perhaps more interested in hearing about the continued growth of its cloud computing division, Amazon Web Services.
Overall, Amazon reported adjusted earnings of $3.27 per share, absolutely crushing the Zacks Consensus Estimate of $1.22. Meanwhile, the company saw revenue figures of $51.04 billion, topping our consensus estimate of $50.17 billion and jumping roughly 43% from the year-ago period.
But as mentioned, many Amazon investors are most interested in hearing about the company’s Web Services unit (also read: The Complete Guide To Everything Owned By Amazon).
AWS is a collection of enterprise-level platforms designed for websites and companies that can’t afford the time or money it takes to develop their own server farms. In other words, AWS provides cloud-based storage and templates for companies to quickly boost their computing capabilities.
Launched a decade ago, AWS has really exploded in popularity over the past few years. In the trailing two quarters, Amazon has posted segment revenue growth of 44.4% and 41.8%, respectively, in the AWS unit.
We judge the performance of these segments using our exclusive Zacks Non-Financial Metrics Consensus Estimates. The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.
Heading into the report, our consensus estimates were calling for Amazon to report AWS revenues of $5.24 billion. Amazon investors will be pleased to note that the company just reported first quarter fiscal 2018 revenues of $5.44 billion for AWS.
This results surpasses our estimate and represents year-over-year growth of 49%. Segment operating margin as a percentage of AWS net sales was 25.7%, up from 24.3% in the prior-year period. Operating income in the unit climbed 57% to touch $1.4 billion.
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