Jeff Bezos adds billions to his fortune as Amazon reports profit surge

Jeff Bezos, the world’s richest man, added another couple of billion to his fortune on Thursday as Amazon, the company he founded, announced it had made close to $2bn in profits in the three months running up to Christmas.

Jeff Bezos

The news, which came as Apple and Google’s parent Alphabet, also reported results, sent Amazon’s share price soaring over 4%. Bezos owns about 16% of the company and has already added $20bn to his fortune this year, bringing his total net worth to more than $119bn.

Apple and Google were less fortunate. Apple’s shares wobbled in after hours trading despite announcing its best ever quarterly revenues. Investors have become spooked that sales of its flagship iPhone have stalled.

Amazon posted revenues of $60.5bn for the three months to the end of December, up from $43.74bn in the same period a year earlier.

The Seattle-based company reported net income of $1.9bn as it sold more voice-activated Echo devices and added more Prime members. The strong results were helped by consumers’ greater willingness to do their holiday shopping online and by Amazon’s cloud business, Amazon Web Services, a profit engine for the corporation that is growing at 40% despite increasing competition from Microsoft and Google.

Bezos leapfrogged over Bill Gates and Carlos Slim last year after Amazon’s share price rose more than 50%.

Analysts said they would look closely at the Whole Foods supermarket chain, newly added into the company’s portfolio, as the engineers seek to marry Amazon e-tailing tech to food distribution. Last month, the company opened its first checkout-free store, causing shares to jump.

But they also warned that that heavy spending on streaming entertainment could hold the share value down. The company is also spending heavily on developing Alexa AI assistant technology, on opening more fulfillment centers and its plans to open a second US headquarters, HQ2.

Apple raked in a record-breaking $88.3bn in the last three months of 2017.

The world’s most valuable company sold 77.3m iPhones over the quarter, down 0.9% compared with last year, despite the fact that it had introduced three new models.

The decrease fueled fears that its latest flagship model, the $1,000 iPhone X, has not proved a hit with consumers. The Wall Street Journal reported this week that Apple has slashed planned production of the pricey handset because of weaker-than-expected demand.

The last quarter of the year is traditionally Apple’s strongest, boosted by new releases timed for the holiday season. But Apple suffered delays to the release of the iPhone X, its HomePod smart speaker missed the Christmas season altogether and the company’s reputation was dented by news that it was slowing the performance of older iPhones.

Nevertheless this was a bumper quarter for Apple comfortably beating its previous record of $78.4bn for a quarter set in the same period a last year. The company made a profit of $20bn.

“We’re thrilled to report the biggest quarter in Apple’s history, with broad-based growth that included the highest revenue ever from a new iPhone lineup. iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November,” said Tim Cook, Apple’s CEO.

Alphabet, once the hottest tech company on the block, had the worst day on Tech Thursday. The company announced a loss after taking a $9.9bn charge related to the new US tax law. The tax change, introduced in December by President Donald Trump, is expected to boost the profits of US corporations in the long run. Excluding the one-off tax hit, Alphabet reported a 28% increase in profit to $6.84bn compared with the year before.

(THE GUARDIAN)