SAN FRANCISCO, (Reuters) – Investor enthusiasm for Amazon.com Inc is pretty consistent: the stock tends to rise, even though the company isn’t consistent about making profits.
On Thursday it posted second quarter profit of $92 million on sales of $23.19 billion, only its third quarterly profit since the first quarter of 2014. Amazon has reported an annual net profit in 10 of its 18 years as a public company, and only twice in the last four years. On Friday, Amazon shares closed at a record high of $535.50 and the company passed Wal-Mart in market value.
Though some investors have expressed concern about the uneven results, Amazon said Thursday, as it has in the past, that the online retailer will invest on everything from its cloud computing business to gadgets like the Kindle, without worrying about quarterly results.
“This (profit) is more of an anomaly because they operate on a mindset that if there’s profit they’re not being creative enough,” said Michael Yoshikami, CEO of Walnut Creek, California-based Destination Wealth Management, which has $1.5 billion under management and doesn’t hold Amazon. “They’re a huge capex, infrastructure company and obviously there’s lot of things they can spend their money on.”
One area that excites Wall Street for its profit-making possibilities is its cloud computing business, Amazon Web Services, which has more than 1 million active customers in 190 countries and is planning to expand to India. The division’s revenue rose more than 80 percent in the second quarter to $1.82 billion and Amazon said it had an operating profit margin of 21.4 percent.