Amazon Q3 sales report 2019 | A comprehensive analysis
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It is the time that Amazon discloses its Q3 sales report for the current year (2019). Therefore we as witnesses observed the enhancement of sales by 24%. Besides, the monetary equivalent of it is estimated to be roundabout $70 billion. The third quarter as earlier has been calculated up till September 30, 2019.
This quarter three sales disclosure by Amazon shows a gradual increase as compared to the report for the last year.
The highlights of cash flow depict for Amazon Q3 sales report:
- Operating cash flow increased by 33% to $35.3 billion for the trailing twelve months.
- $26.6 billion for the trailing twelve months ended September 30, 2018.
- Free cash flow increased to $23.5 billion for the trailing twelve months.
- The $15.4 billion trailing twelve months streak ended on September 30, 2018.
- Principal repayment of all other finance leases and financing obligations increased to $10.5 billion for the trailing twelve months.
- Amazon’s third-quarter report also reveals the net growth in profit ranging from $33.7 billion to $39.7 as compared to the last year.
Amazon’s third-quarter sales analysis
Going deeper and analyzing shows us the exact picture of the actual growth for Amazon. It reveals Operating income decreased to $3.2 billion in the third quarter, compared with operating revenue of $3.7 billion in third-quarter 2018.
- Perhaps, the growth excludes $500 million unfavorable impacts from year-over-year changes in foreign exchange rates.
- Besides, the revenue for the “other” category mostly comes from ads.
- The ad sales rose to 45% in quarter three, amounting to $3.59 billion. Operating income decreased to $3.2 billion in the third quarter.
- As compared with the operating revenue of $3.7 billion in third-quarter 2018 is reduced, showing a severe impact on Amazon report earnings.
- The net income fell to $2.1 billion in the third quarter, or $4.23 per diluted share, compared with net income of $2.9 billion, or $5.75 per diluted share.
Amazon sales report Q3 2019Thus to wrap up from our analysis we can emphasise on the fact that, though there is a significant rise in the overall sales, Operating income has decreased to $3.2 billion in the third quarter, compared with operating revenue of $3.7 billion in third-quarter 2018.
Why did net income in Q3 got affected?
“The reason for the decrease in the operating income of Q3 of Amazon in 2019 was the surge to enforce the conversion into the 1-day shipping program”.
This led to a dent in the bottom line as the net income fell by 26%. Just after which Jeff quoted:
“We are coming up to gear up our 25th holiday season the best for Prime customers — with millions of products available for free one-day delivery. Customers love the transformation of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”
A jolt in the Amazon third-quarter sales report:
- Therefore, justifying his quote, Amazon’s expenses rose markedly, due in large part to its ongoing effort to shorten Prime shipping to one day.
- Fulfillment costs alone in the quarter went to $10.2 billion from $8.3 billion in the year-ago period. As a result, the streak of profits breaks, with earnings declining for the first time in two years.
- Net income fell to $2.1 billion from $2.9 billion a year ago, and revenue decreased to $3.2 billion from $3.7 billion last year.
- Furthermore, it is interesting to know that the spotlight could be entirely on the Amazon ads. The ad business showed growth in the graph of the net profit of the company.
- Otherwise, there is a drop in the stock, and it remained down 6% in premarket trading on Friday.
The growth rate of more than 45% for advertising sales outpaces the first two quarters of the year, at 34% and 37%, respectively.
Source: Market Realist
An Illustration of the prospects of the report:
- Amazon very well knows that ads would help connect better with the audience in masses.
- Amazon’s stepping into the digitalization will threaten Google and Facebook, enhancing their status their current “duopoly” status into a “triopoly. “
- Perhaps, looking onto the pressure on the retailers and the investment ($1.5 billion in Q4) on 1-day shipping is expensive. But they still believe that Amazon has made a win that its move to speed up delivery contributed accordingly to top sales in the quarter.
Forrester Research said in a new report shared with Marketing Dive.
- Moreover, we expect that the other ad-firms & ad-agencies would be adopting the same technique Amazon is following right now.
Perhaps, eliminating the involvement of the middlemen.
How Amazon’s third-quarter sales report would affect online sellers?
Has Amazon got the risk-taking ability of innovation, or is it still just trying the luck of the sellers? People still believe that Amazon is still a developing company and is even investing. There are chances sales would hype in the last quarter. In addition, Sellers aspiring for maximum profit in the fourth quarter can look forward to selling on Amazon.
- With its announcement of the third-quarter earnings, retailers face declining sales.
- Sales at physical stores dipped for Amazon.com.Amazon’s financial reports competes with its sellers to the company’s environmental impact.
- Amazon is facing challenges, criticisms from multiples perspectives, as it has faced challenges to meet the requirements of its sellers(need to know about how to sell on Amazon ). Thursday’s earnings report comes just a month after more than 1,500 Amazon corporate employees walked off the job. Thus showing the negative impact the quarter three results have shown in concern with the sellers. This would, therefore, benefit the seller with the increase in sales overall.
Retailers may have more time to tighten their seat belts and prepare more than they think as Episerver’s survey predicts the highest number of shoppers (21 percent) start their holiday shopping on December 1-15 versus any other period in Q4. Consumers do not care about shipping delays with a third (31 percent) of online shoppers expecting two-day shipping, year-round.
The other illustrations that could be established were:
- Sixty-eight percent of online shoppers often or always compare what they find on a brand or website to the things present on Amazon.
- Traffic from social to ecommerce websites has almost doubled itself in the first half of 2019 compared to 2017 and 2018. Therefore, opening the door for retailers to tune up their social content where Amazon is less mature.
- The majority of holiday shoppers (39%) prefer to do most of their shopping online but a third of online shoppers (31%) expect the ability to make purchases online and pick them up in store, and therefore determining the desires, behaviors and common trends of over 4,500 global online shoppers from the United States, the United Kingdom, Germany, Sweden, Belgium, the Netherlands, Luxembourg and Australia.
Thus the Retailers might get a slight advantage and have more time to prepare than they think. Therefore from the overall analysis, we could wrap up to the fact that though the conversion had led to a net loss in income. It can be a profit-making statement for the sellers in the near future.