Amazon’s cloud computing cash cow

Amazon’s cloud computing cash cow: AWS, now a $10B business, fuels record quarter for company:

Amazon has the pleasure of your business computing in the cloud, and therefore investors.

The company crushed the expectations of analysts based in Seattle for its first quarter 2016 earnings on Thursday as shares of the company planted more than 12 percent in after hours operations.

Wall Street expects Amazon to post earnings per share of $ 0.58, but the company ended the quarter with a record $ 1.07 EPS, almost double the estimate. That's a net loss of $ 0.12 last year quarter.

earnings growth - Amazon launched a result for the fourth consecutive quarter - certainly merit largely to Amazon Web Services, which reeled in $ 2.57 billion in Q1 2016, compared to $ 2.4 billion in the previous quarter and $ 1.57 million a year ago, a year of 64 percent growth year. Analysts had expected AWS $ 2.53 trillion last quarter. Operating income in Q1 AWS was $ 604 million compared with $ 195 million last year.

During the last four quarters, AWS has generated $ 8.7 billion in revenue for Amazon. The company began to break its financial statements AWS year ago.

In the press conference today, Amazon CFO Brian Olsavsky called AWS of $ 10 billion. He reiterated that the Amazon was "very happy" with the top line and bottom for AWS in Q1 2016, specifically targeting an operating margin of 23 percent, compared with 12 percent a year ago.

"We believe it is very early, and not much room for several winners in this industry," Olsavsky said. "We wish we found it. We have a leadership position and definitely try to exploit that."

Charlie O'Shea, retail analyst at Moody, highlighted the "impressive" operating margin of AWS.

 "Once again, Amazon Web Services showed significant growth, with revenues up to $ 1 billion, but the most impressive is the metric margin, which almost doubled to 23.5%, generating more than $ 600 million, or approximately 60% of total revenues in the Amazon, "O'Shea said in a statement.

He was asked about a rate of sequential growth slowed slightly AWS - which recorded $ 2.4 billion in revenue for Q4 2015, which increased 69 percent year on year, compared with the YOY growth by 64 percent in Q1 2016 - ". draw too many conclusions about long-term margins" Olsavsky warned that people should not

"Margins are potholes and are affected by investment levels, lower prices and cost efficiency," he said.

Olsavsky note that Amazon AWS has reduced rates 51 times since its launch the product. Phil Hardin, director of Amazon Investor Relations, said "we are not in the business of higher prices." Since Amazon also pushed prices down income growth is an indication of regular use of AWS, Hardin said.

Olsavsky added that AWS "innovate at a rapid pace" with 217 significant new features delivered in the last quarter, up 25 percent from last year.

Retail stacked against Amazon, another big money maker for the company, it is easy to see why Amazon AWS continues to invest in, which is used by clients like Netflix and Apple are competing with similar offers Microsoft cloud and Google.