Amazon Web Services reported third-quarter revenue of $9 billion. This is 34% more than last year, and operating profit was $2.26 billion. But since there are no indicators in the income report, and according to the Wall Street Journal, Amazon forbids its third-party seller to use FedEx's ground delivery network for Prime deliveries, citing a decrease in productivity ahead of the last holiday shopping season as a result of Amazon stock a little down.
Amazon's efforts to improve product delivery and manage its delivery network are a threat to existing shipping companies such as FedEx and United Parcel Service (NYSE: UPS). To strengthen its network, Amazon has acquired cargo planes, vans and trucks and plans to double US shipments this holiday season from the previous year.
Amazon CEO Jeff Bezos announced that in 2021, the company will open a new air corridor in Kentucky, which will house 50 aircraft designed to deliver cargo to customers more quickly. This will help the company reduce its reliance on FedEx and UPS. In June, Amazon also released a drone that aims to speed up delivery times for Prime members. Which benefited Amazon shares.
There are about 69 million Amazon Prime members. This is 13% more than in the third quarter.
Consumers pay a monthly or annual subscription fee to Amazon Prime and receive several benefits in return, including free shipping.
According to the survey, 95% of Prime subscribers visit Amazon monthly, indicating a consistently high level of activity among Prime members.
Amazon announced its one-day delivery plan in the first quarter and initially committed to spending $800 million on the program. Management recently indicated that they plan to spend another $1.5 billion.
It is worth paying attention to some of the forecasts of the company itself, including Amazon's advertising business, thanks to which the company's profitability will increase to 17.6 billion dollars in 2020, which is 36% more than this year, and in 2025 - 46.6 billion dollars.
To date, Amazon shares have risen by 0.9%, which indicates a positive background and continued growth, and, perhaps, through some correction, the shares will reach the level of 1830.50 soon.
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