Amazon reveals record profits as employees wage increase pays off

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 1st Feb 2019) London, Uk – –

Amazon has revealed a record profit as a jump in Christmas sales meant it shrugged off the impact of a hefty pay increase for its staff.

The online retail giant said revenues in the final three months of 2018 grew by 20pc to $72.4bn, while profits surpassed $3bn for the first time.

The figures were the latest evidence that the company, which has long shunned profits as it focuses on growing its online empire, is finally producing reliable returns.

While growth in Amazon's maturing North American business slowed, the company’s international sales picked up steam after it threw resources behind markets such as India and Australia.

The results were the first to show the impact of Amazon’s pay rise for hundreds of thousands of workers in the US and the UK. In November, the company raised minimum pay for warehouse staff from £8 to £9.50 in the UK, and more in London, and to $15 in the US.

However, the company appeared to swallow the increase comfortably, with profits increasing by 63pc. Amazon has now reported a profit of $2bn or more for the last three quarters, having previously swung between losses and marginal profits.

The company’s shares fell towards the end of last year when a muted Christmas forecast raised fears that a slowing economy could limit growth. However, Wall Street had become more optimistic about its prospects amid signs of a resilient US economy, and Amazon now vies with Microsoft for the position of world’s largest company.

Jeff Bezos, Amazon’s chief executive, remains the world’s richest person, although the billionaire’s recently-announced divorce has raised the question of who will control his stake and his majority voting power in the company.

The company has expanded beyond its online shopping website, most notably in its cloud computing enterprise, Amazon Web Services (AWS), and the US supermarket chain Whole Foods, which it bought for $13.7bn in 2017. Sales at AWS, which provides remote computing services to businesses, rose by 45pc.

Amazon’s shares wavered in late trading. Despite the company’s revenues being better than Wall Street had expected, it warned of a slowdown of growth in the next quarter, saying sales would increase by between 10pc and 18pc.

Bezos pointed to the success of its voice recognition system Alexa, saying its Echo Dot speaker was the best selling item on Amazon over Christmas.

By  James Titcomb