Amazon plans to cut delivery times after delivering strong quarterly results

The Amazon warehouse in Leeds.
The Amazon warehouse in Leeds.
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Cloud services and subscription-based products such as Prime helped Amazon achieve strong quarterly results, with net sales up 17 per cent to 59.7 billion dollars (£42.6 billion).

The company’s growing cloud business - Amazon Web Services - delivered the biggest area of growth in the three months to the end of March, with net sales at 7.7 billion dollars (£6 billion), up 41 per cent year over year.

Operating income for Amazon Web Services came in at 2.2 billion dollars (£1.7 billion).

Seattle-based Amazon said net income increased to 3.6 billion dollars (£2.8 billion) in the first quarter of 2019, more than double the figure achieved in the same period last year when it totalled 1.6 billion dollars (£1.2 billion).

Subscription services, which include everything from Prime to audiobooks, also delivered the biggest percentage hike, standing at 4.3 billion dollars (£3.3 billion) in net sales, up 40 per cent from last year’s 3.1 billion dollars (£2.4 billion).

Online store net sales only increased 10 per cent compared with the previous year but still provided the lion’s share at 29.4 billion dollars (£22.8 billion).

Its smaller physical store business proved less fruitful, only increasing by 1 per cent to a total of 4.3 billion dollars (£3.3 billion).

Elsewhere, advertising also contributed a smaller amount at 2.7 billion dollars (£2.1 billion) but still managed a 34 per cent rise on this time last year.

Chief executive Jeff Bezos said Amazon was committed to investing in new products and services.

He also highlighted the work being carried out by Amazon to help young people achieve their potential.

Mr Bezos said: “The son of a working single mom, Leo Jean Baptiste grew up speaking Haitian Creole in a New Jersey home without internet access.

“He’s also one of our inaugural group of 100 high school seniors to receive a $40,000 Amazon Future Engineer scholarship and Amazon internship

“He rose to the top of his class and is set to study computer science at college this fall, with the dream of getting a job in machine learning.

“Our passion for invention led us to create Amazon Future Engineer so we could help young people like Leo from underrepresented groups and underserved communities across the country. In addition to 100 college scholarships a year, we’re funding computer science classes in 1,000 high schools and counting, and inspiring younger kids to explore coding through coding camps and after-school programmes.

Mr Bezos added “We love this programme, and we can’t wait to see what Leo and his fellow future engineers invent.”

Amazon also plans to deliver packages to members of its loyalty club Prime in just one day, instead of two, as it prepares to increase spending.

“Amazon is cranking it up a notch, trying to set themselves apart,” said Cathy Morrow Roberson, a former UPS analyst who founded consulting firm Logistics Trends & Insights.

She estimated that roughly 20 per cent to 25 per cent of Amazon’s shipping is currently within one day, noting that speedy service was easy in large US metropolitan areas where it already had built out its delivery network. However, costs can be prohibitive elsewhere.