Behind Amazon.com's (AMZN) impressive second-quarter numbers Thursday is the e-commerce empire's aggressive investment strategy that's starting to come to fruition.
Seattle-based Amazon reported yet another solid quarter last week, beating consensus for both revenue and earnings per share. The e-commerce company reported revenue of $30.4 billion and EPS of $1.78 vs. Wall Street's anticipation of $29.6 billion in revenue and $1.11 in EPS.
With impressive numbers, Amazon is indicating that it may finally be shifting toward consistent profitability after years of posting loss largely due to pouring aggressive investments. As Jeff Bezos's investment strategy continues to be a main driver of growth and success at Amazon, the e-commerce giant is already eying its next big areas of investment: fulfillment and Prime Video.
"The days of operating loss quarters might be behind us," said Edward Jones analyst Josh Olson.
As Amazon enjoys a nice balance between growth and profitability, next quarter will be one of heavy investment for the company, particularly ahead of the holiday season.
Among key areas of investments will be fulfillment by Amazon, or FBA for short, and content such as Prime Video, Olson explained, adding that Bezos and his fellow Amazon executives have been very sensitive to return on investments.
The e-commerce giant has been building out its fulfillment capacities to allow more third-party vendors to warehouse and ship goods through Amazon. In particular, Amazon revealed during a call with investors on Thursday that it plans to open 18 fulfillment centers in Q3 to maximize capacity ahead of the holiday season.
