Amazon shares soar as earnings top expectations

Amazon shares soared Thursday after the Internet giant reported earnings that topped expectations, boosting revenue from its fresh acquisition of grocery chain Whole Foods and an expanded line-up of devices tapping into its digital assistant Alexa.

Profit for the third quarter was $256 million, up slightly from $252 million a year ago while revenue jumped 34 percent to $43.7 billion.

The Seattle-based company has grown from its online retail roots to cloud computing, streaming video, artificial intelligence and more.

Amazon shares rallied nearly eight percent to $1,050 in after hours trade on the stronger-than-expected results.

In its earnings statement Amazon's founder and chief executive Jeff Bezos focused on Amazon's fast-growing digital assistant Alexa, which is included in its connected speakers and third-party products ranging from appliances to automobiles.

"In the last month alone, we've launched five new Alexa-enabled devices, introduced Alexa in India, announced integration with BMW, surpassed 25,000 skills, integrated Alexa with Sonos speakers, taught Alexa to distinguish between two voices, and more," Bezos said.

"Customers have purchased tens of millions of Alexa-enabled devices... With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better."

Amazon said Whole Foods, the natural foods chain it acquired this year, provided $1.3 billion in revenue and $21 million in operating income for the company.

Excluding the impact of Whole Foods, net sales were up 29 percent, Amazon said.

Its cloud computing arm Amazon Web Services accounted for $4.6 billion in revenue and $1.2 billion in operating income.

Amazon's expansion into new sectors and markets has lifted the company's share price and made Bezos one of the world's richest individuals -- briefly the richest at one point, according to a Forbes survey.

Along with its growing influence, Amazon has become one of the most valuable companies on the planet alongside US tech rivals Apple, Facebook and Google parent Alphabet.

Amazon said that for the fourth quarter, it expects revenues in a range of $56 to $60.5 billion, representing growth of 28 to 38 percent compared with last year.

Independent tech analyst Rob Enderle said the fact that Amazon did so well in the quarter leading up to the prime holiday shopping season suggests the firm will "knock if off the rails" as the year comes to a close.

- 'In good shape' -

Neil Saunders of the research firm GlobalData called the Amazon results "stellar."

He noted that Amazon has been able to drive growth from online sales with its Prime subscription service, which offers free delivery, video and other extras.

"Overall, Amazon is in very good shape," Saunders said in a research note.

As for Whole Foods, he said "it is too early to conclusively say whether this is a success story" but that "initial signs are encouraging, and our data show some very slight movements on price perception... Amazon's approach is being noticed by consumers."

The $13.7 billion acquisition of Whole Foods this year came with plans to broadly integrate its bricks-and-mortar stores into Amazon's subscription-based "Prime" program, which already grants customers free two-day shipping, access to original programming and other perks.

The companies also emphasized their determination to cut prices at a franchise that for years has had the ironic moniker of "Whole Paycheck" for its ability to induce sticker shock at the chain known for healthful and organic food.

"I think over time you'll see more cooperation and working together between AmazonFresh, Prime Now, and Whole Foods as we can explore different ways to serve the customer," Amazon chief financial officer Brian Olsavsky said during an earnings call with analysts.

Baidu shares plunge over poor revenue outlook
Beijing (AFP) Oct 27, 2017 - Shares in Chinese internet giant Baidu plunged as much as 15 percent in after hours trading Friday when it said revenues would take a hit in the final quarter because of self-imposed content restrictions during the Communist Party congress.

The projected decline in revenue at Baidu's movie and television streaming unit iQiyi, came from limiting screening of popular TV shows during the runup to the congress that ended this week by giving President Xi Jinping a second term at the helm of the party.

Television stations in China have featured wall-to-wall coverage of the 19th Party Congress. Baidu's Chief Financial Officer Herman Yu said that, "to show our respect, iQiyi adopted a self-restriction to not show hot series during this time."

The search giant's forecast fourth-quarter revenue of up to 23.4 billion yuan fell short of the 24.8 billion projected by analysts cited by Bloomberg News.

Its third-quarter report beat analyst expectations on income and matched them on revenue, according to Bloomberg News.

Net income for the period reached 7.9 billion yuan, on sales of 23.5 billion yuan marking a 29 percent increase from the same period last year. Mobile revenue accounted for 73 percent of total revenue, up from 64 percent in the same period last year.

Baidu's search engine dominates the Chinese market, but in recent years the company has struggled to diversify into other profitable business lines and suffers from increasing competition from Tencent and Alibaba.

It sold off its loss-making food delivery arm this summer while its core online advertising business has taken a hit after a scandal broke out last year over the promotion of search results featuring false medical claims.

The controversy prompted regulators to impose new restrictions on promoted search results, forcing Baidu to better police its advertisers.

That in turn trimmed Baidu's advertiser ranks, and its count of online marketers was down seven percent in the third quarter from the same period last year.

The company is in the midst of a turnaround, refocusing its business on artificial intelligence and autonomous vehicles.

But much of the company's new investment will not have material impact on results in the near future, company officials told investors on Friday.

Bidding war heats up for $5 billion second Amazon HQ
New York (AFP) Oct 18, 2017
It's the prize of a lifetime - a $5 billion investment creating 50,000 well-paid jobs that everyone wants, but only one US city will get. From East to West, from North to South, metropolises across the United States are locked in a frenzied bidding war desperate to woo Amazon into favoring them as the site of the e-commerce giant's second headquarters. From $7 billion in tax breaks in N ... read more

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