Amazon income Crushes Estimates as Cloud-provider revenue Soars

Amazon Profit Crushes Estimates as Cloud-Service Revenue Soars Inc on Thursday pronounced profit and sales that blew beyond analysts’ expectancies, sending its shares soaring in after-hours buying and selling and demonstrating the growing marketplacepower of its middle retail business and new cloud services department.

The outcomes draw a sharp evaluation to the disappointing fourth area Amazon mentioned in January, which renewed worries among a few shareholders approximately the business enterprise‘scomparatively skinny earnings margins. stocks of the sector‘s largest on line retailer jumped almost 13percent to $679 in extended trading on Thursday.

Amazon’s performance additionally assuaged issues approximately a broader slowdown among tech andnet corporations after Apple, Microsoft and Intel all pronounced disappointing profits.

“It did repair my religion,” said Dan Conde, an analyst at the company method group, who maintains aclose eye on Amazon’s cloud enterprise.

The corporation also supplied a brilliant outlook, with revenue steering for the current quarter of $28 billion to $30.five billion, as compared to the $28.33 billion analysts had anticipated.

whilst Amazon displayed outstanding boom for a enterprise its lengthrevenues final area rose 28.2percent to $29.thirteen billion, the largest revenue boom due to the fact that 2012 – its Amazon netofferings (AWS) cloud computing division was the highlight. revenues at the division climbed 64percentage to $2.56 billion at the same time as working income extra than tripled to $604 million.

even though running margins fell at the unit as compared to last quarter, as Amazon spends heavily to compete with rivals like Microsoft and Google, they remain a healthy 27.9 percent. That compares to 28.five percent remaining sector, and sixteen.nine percentage a year earlier.

AWS, released 10 years ago, introduced greater profit in the sector than Amazon’s retail business.research corporations say AWS has more than 30 percentage of the shortdeveloping cloud-computingmarket and it remains a ways beforehand of opponents such as Microsoft and Google.

Amazon said it also has visible strong increase in subscribers to its high loyalty software, which givesone-hour shipping, unique television programming and get admission to to its digital leisuremerchandise consisting of prime track and high Video for an annual price of $ninety nine.

The employer said it might ramp up spending to trap top customers through video content, particularlyits “high Originals” – suggests Amazon develops itself. That strategy builds on the achievement ofprograms inclusive of “Mozart inside the Jungle” and “obvious,” which every have gained Golden Globe awards.

“We sense that program is operating,” chief monetary Officer Brian Olsavsky stated in a conference callwith analysts. “we are going to seriously increase our spend in that location.”

The agency lately launched a monthly subscription to the program for $10.ninety nine. Amazon has alsosaid it plans to offer its video streaming carrier as a standalone service for a monthly rate of $eight.ninety nine.

Amazon does not get away the numbers of prime subscribers, but client Intelligence research partnerssays this system has 54 million US individuals. Amazon’s growth at the sales side indicates that the relationship model round Amazon prime is operating, said Frank Gillett, a senior analyst at Forresterresearch.

Amazon on Thursday also stated it would continue to build its logistics operations, where it has started out the use of its very own vehicles and planes to supplement vendors which include u.s.a.and Fedex and provideequal day service.

they are nonetheless super partners, had been, and could continue to be for the future,” Olsavskystated in response to an analyst who requested if Amazon could ever entertain handing over objects forthe ones companies. “however we see opportunities where we need to feature extra capacity and we are filling those voids.”

Amazon founder Jeff Bezos also touted the success of recent hardware merchandise. “Amazon devicesare the top promoting products on Amazon,” he stated in a press launch, citing the Echo voice-responsedevice and the fireplace television Stick.

The Echo has been a wonder hit and Bezos said inside the announcement that the enterprise could notkeep it in inventory, however he declined to provide income figures.

Amazon’s net income in North america, its largest market by way of sales, expanded 26.8 percentage to $17 billion within the first area.

Amazon said internet profits of $513 million, or $1.07 per proportion, for the quarter ended March 31, marking a fourth immediately region of earnings for the as soon as perennially cashlosing organisation. A yr earlier, Amazon said a loss of $fifty seven million, or 12 cents in line with percentage.

Analysts on average had anticipated a profit of fifty eight cents consistent with proportion and sales of $27.98 billion, in line with Thomson Reuters I/B/E/S.

Delivery start-ups explore additional income streams

Hyperlocal delivery start-ups, including food-tech and logistics companies, together garnered $270 million in funding in 2015, but the sector has also seen a massive correction in the form of closure. Photo: Ramesh Pathania/MintHyperlocal delivery start-ups, including food-tech and logistics companies, together garnered $270 million in funding in 2015, but the sector has also seen a massive correction in the form of closure. Photo: Ramesh Pathania/Mint

With investors turning increasingly cautious, hyperlocal delivery start-ups are exploring additional revenue streams such as advertisements and promotions to try and mitigate the impact of losses incurred by their core offerings.

Shadowfax Technologies Pvt. Ltd and Opinio (Moonshots Internet Pvt. Ltd), which currently charge around Rs.50 per delivery within a 5-km radius, are testing such alternative revenue channels.

Shadowfax has trained its delivery personnel to hand out discount coupons from merchants to consumer as well as brief consumers about products.

The pilots are being run in Delhi, Mumbai and Bengaluru.

Opinio, on its part, is branding its delivery bags with posters of partner start-ups who want to advertise in a particular locality.

“That will be like a moving hoarding,” said Mayank Kumar, co-founder and chief executive at Opinio.

This is expected to attract companies such as rental accommodation classified start-ups or hyperlocal services such as beauticians or plumbers.

While Shadowfax will charge an additional Rs.3-4 for every interaction with the consumer, Opinio plans to price its services at around Rs.2,000 every day for every 50 such bags handed out.

The firm may explore 15-day or monthly packages, depending on demand. Both firms declined to identify partner merchants. They get a major chunk of their business from food delivery, besides grocery and pharmacy.

Hyperlocal delivery start-ups have been struggling to build sustainable business due to poor unit economics. While the commission from merchants barely makes for the cost of delivery, which could go as high as Rs.60-70 per delivery, these companies also offered concessions to merchants. Some start-ups even worked on a commission basis, charging merchants a part of the order value.

However, they claim that all such practices have been halted in a bid to generate more revenue and increase operational efficiency.

“The target is to achieve 25% revenue growth month-on-month,” said Abhishek Bansal, co-founder and chief executive at Shadowfax.

Hyperlocal food delivery start-up Swiggy (Bundl Technologies Pvt. Ltd) is also taking steps to reduce cash burn. The company plans to set up cloud kitchens in partnership with restaurants, a move that is expected to help it command a much higher commission for orders serviced through the cloud kitchens than the average 15% it currently earns on every order.

According to Tracxn, a start-up tracker, hyperlocal delivery start-ups, including food-tech and logistics companies, together garnered almost $270 million in funding in 2015.

The sector has also seen a massive correction in the form of closure and consolidation in the space in the last one-and-a-half years. Food-tech start-ups such as Dazo shut shop, hit by ebbing investor interest. Tiny Owl restructured its operations and fired hundreds of people across multiple cities. PepperTap and Grofers, too, shut operations in smaller cities.

According to Venkatesh Peddi, vice-president, venture capital firm IDG Ventures, the market is being cautious on the fund raise side, but such challenging times also see innovations take place in business models.

“Some of these things could actually work out very well in the long run, some may not. It depends on how well they are executed and how they pan out on the ground,” he said.


RBI Asks Income Tax Assessees to Pay Dues in Advance

RBI Asks Income Tax Assessees to Pay Dues in Advance
Mumbai: The Reserve Bank of India (RBI) on Monday appealed to income tax assessees to pay dues ahead of the due date as well use alternate channels of authorised banks to avoid the rush during end of March.

“Pay I-T (income tax) dues in advance at RBI or at authorised bank branches. Appeal to income tax assessees to remit their income tax dues sufficiently in advance of the due date,” the central bank said in a release.

“It is observed that the rush for remitting Income-Tax dues through the RBI has been far too heavy towards the end of March every year and it becomes difficult for the RBI to cope with the pressure of issuing receipts although additional counters to the maximum extent possible are provided for the purpose”, it said.

The RBI said assessees can use alternate channels like select branches of agency banks or the facility of online payment of taxes offered by these banks.

A total of 29 agency banks have been authorised to accept payments of income tax dues.

The authorised banks include SBI (State Bank of India) and its five associates, HDFC Bank, ICICI Bank, Axis, Bank, Punjab National Bank, Bank of Baroda, Bank of India, Indian Overseas Bank.

Among others are Corporation Bank, Dena Bank, Canara Bank, Central Bank of India and Syndicate Bank.

The RBI said that remitting dues at the designated banks will obviate the income tax assessess’ inconvenience in standing in long queues at RBI offices.


Expecting Income Tax Incentives On Bank Deposits: Mukesh Butani

Mr Butani expects the finance minister to announce some changes in the indirect tax regime to usher in GSTFinance Minister Arun Jaitley will focus on three to four broad themes in this year’s budget, says Mukesh Butani, managing partner at BMR Legal. Tax benefit to deal with inflation, rejigging of threshold and slab rates and tax relief on interest earned from bank deposits could be announced in budget, he added.

“There could be some form of incentive for garnering greater degree of deposits in the banking sector. He (Jaitley) could raise the limit on interest deduction on interest from bank is concerned,” Mr Butani told NDTV Profit. (Watch)

According to the current tax laws, if the total interest on bank deposits in a financial year crosses the threshold limit of Rs 10,000, tax deducted at source (TDS) is applied on the interest earned.

In the previous year’s budget, Mr Jaitley had announced the government’s intention to reduce corporate tax from 30 per cent to 25 per cent over the next four years. Mr Butani expects the finance minister to outline a roadmap for lowering of corporate tax rate.

“The primary agenda would be how the corporate tax rate would be lowered over the next 4 years, including the phase-out programs for various exemptions.”

Indirect tax

Mr Butani expects the finance minister to announce some changes in the indirect tax regime to usher in GST (goods and services tax).

“In the light of Parliament logjam on GST, people would be wondering what is the finance minister is going to do as far as GST is concerned. Taking away of the central sales tax (CST) will be important signal for the GST,” he said. “The government is well within its realm to carry out the requisite amendments for indirect tax central sales tax levies for seamless credits. That will ease pressure and signal that the central part of GST is concerned, at least seamless credits are available.”

CST is levied on goods in inter-state trade. Under the proposed GST regime, major central and state taxes will get subsumed into GST to bring in a uniform tax regime across the country. In anticipation of implementation of GST, the central sales tax goods was brought down from 4 per cent to 2 per cent in two phases in 2007-2009 but this tax has not yet been fully phased out yet.

Mr Butani also expects the government to address the inverted duty structure issue in some sectors. Under the inverted duty structure, the import duty on the raw material is more than the import duty on the same finished product, a taxation structure the hurts the competitiveness of domestic manufacturing industry.

“You could also very well see, the continuing efforts of successive governments, including this government, to address the inverted duty structure in certain industries in which it is still around,” he said.

Mr Bhutani also expects the finance minister to announce administrative tax reforms to increase the ease of doing business in India and also defer the general anti-avoidance rule (GAAR) for another year. (Read: 5 facts about GAAR)