Amazon quarterly profit slips

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Amazon said that its contracts with Arianespace, Blue Origin and United Launch Alliance (ULA) are the largest commercial procurement of launch vehicles in history. (AFP)
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  • The e-commerce colossus said its sales climbed to $110.8 billion, but its profit was about half of its net income from the same quarter last year
  • Microsoft, Google parent Alphabet and scandal-hit Facebook have posted whopping profits this week

Amazon on Thursday reported its profit in the recently ended quarter slipped to $3.2 billion as the pandemic, hiring and product shortages drove up costs.

The e-commerce colossus said its sales climbed to $110.8 billion, but its profit was about half of its net income from the same quarter last year.

Global supply chain bottlenecks and a chip shortage have started to weigh on big companies even as a US spike in coronavirus cases driven by the Delta variant would normally have pushed demand from e-retailers like Amazon.

“We’ve always said that when confronted with the choice between optimizing for short-term profits versus what’s best for customers over the long term, we will choose the latter,” said Amazon chief executive Andy Jassy.

Microsoft, Google parent Alphabet and scandal-hit Facebook have posted whopping profits this week, although Twitter reported a large loss due to a shareholder lawsuit settlement.

Big Tech faces heightened scrutiny from antitrust regulators, especially Apple which has appealed a major US court ruling that would force the iPhone maker to loosen its stranglehold of its online app marketplace.

But the pandemic, which roared back to center stage in the United States with the Delta variant surge, has pushed demand for online services.

In Amazon’s case, a growing number of consumers have turned to its platform to get everything from tofu to toilet paper, and its cloud computing division also grew to help businesses and consumers stay connected.

Earlier in the week, Google parent Alphabet announced quarterly revenue of $65.1 billion that eclipsed the same period last year by some 41 percent as the firm’s online ad engine and cloud services helped yield its $18.9 billion profit.

The Silicon Valley colossus remains a centerpiece of online activity, with offerings such as its search engine, ad marketplace and YouTube video platform that give it extensive global influence.

Google’s results came the same day that Microsoft announced a quarterly earnings surge fueled by cloud computing demand, saying it made a profit of $20.5 billion as revenue jumped 22 percent.

Facebook’s strong financial figures coincide with the leading social network battling a fresh crisis since former employee Frances Haugen leaked reams of internal studies showing executives knew of their sites’ potential for harm.

The platform announced that its profit in the third quarter grew to $9.2 billion — a 17 percent increase — and its ranks of users increased to 2.91 billion.

Twitter however on Tuesday posted a loss in the quarter, fueled by the more than $800 million settlement in a lawsuit alleging investors were misled about slowing user growth at the platform.

 

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