Investors keep faith on Bezos even with Amazon’s dinky profit margin of 3.8%
Amazon’s Jeff Bezos is one such person who is simply loved by his investors for his business savvy nature and faith on the company’s performance, no matter what the profit is. On Thursday, Amazon has reported an operating profit margin of 3.8% which is quite laughable in front of huge 45% operating profit of Face Book despite all the news it had been in the recent past. Also, Amazon profit for second quarter is much beyond the forecasts made by Wall Street entities.
The reported 3.8% profit is the highest among all those reported since the middle of 2016 and this has been made possible after a sales of $51 billion merchandise. The shares of the company which climbed more than 67% last year, jumped to a sudden 6% high after the news. The trust of the investors is getting stronger with Bezos reaction to this who was all hail and confident as always.
Amazon is well-known for spending all its money on various kinds of investments, which is good as well. Recently, it has dumped huge investment in Indian market, in its cloud computing business and in the voice enabled gadgets which are the future big demands of the industry. The investment on expansion plans, logistics improvement, warehousing etc also accounts for huge expenditures.
Though Amazon’s core business has registered a low profit margin, its new additions like cloud computing business and home gadgets are expected to bring large profits. In its merchandise business also, the company needs to cut its investment amounts to build strong fundamentals.
Bezos is one of the most inspiring person people look at and his business savvy nature is ultimate. How to turn small profits into big happiness should be learnt from him as he always believes in giving the last laugh.