Amazon overtakes Walmart. These moments are becoming more regular as digital disruption grows. Apple missed, Amazon delivered and had its shares soar 16% higher this morning after it stunned the market with a June quarter profit and higher revenues, when analysts had forecast a loss and relatively mild sales growth. To top it off, the company added a higher-than-expected revenue forecast for the third quarter, but a return to losses.
Amazon’s market value at the end of after-hours trading reached US$263 billion, topping the US$235 billion valuation of Walmart Stores, the world’s biggest bricks-and-mortar retailer (though with a growing digital presence). Walmart sells more than four times more goods around the world than Amazon (close to $500 billion in the current year, against just on US$100 billion for Amazon), and is vastly more profitable. Walmart even pays a dividend, Amazon pays hot air and capital gains. Amazon said sales in its key North American market leapt 25% to nearly US$14 billion, and its cloud-computing revenues surged more than 81% to US$1.82 billion — also much higher than expected. Total revenue rose 20% to US$23.19 billion (the company is on track to top the US$100 billion annual sales target this year), and instead of a loss of 14 cents a share, it made a profit of 19 cents, or US$92 million. Coming after the weak result from Apple (yes, profits and sales were up, but not as much as expected, and the outlook was weaker than expected). Amazon’s result is more in keeping with the better-than-forecast efforts last week from Google and Netflix.
And still on Apple, its SEC results filing revealed it had a huge US$203 billion in cash on its books, including US$181 billion held offshore in low-tax havens, which was up from just over US$137 billion in the June quarter of 2014. Some of that is low-tax money made in Australia. US analysts say a lot of the cash is held in Ireland (let’s hope it doesn’t sink the place). — Glenn Dyer
Trump the chump? According to Donald Trump’s filings with US election officials he says he’s worth US$10 billion. But Forbes magazine says it’s closer US$4 billion, and Marketwatch reckons it’s closer to US$1.5 billion. But left unstated is his long career as a loss-maker for investors. Thankfully, Marketwatch.com has done just that and points out that anyone investing $100 in his Trump Hotels & Casino Resorts when Trump floated it on the US stock exchanges back in 1995, ended up with just US$10 by the time its collapse was cleaned up by April 2004. Trump raised US$140 million in the 1995 float and proceeded to run through it.
Another filing this week from Trump reveals that he is paid up to US$250,000 a speech. Reuters says that’s more than Hillary Clinton, the putative Democratic nominee, who receives US$235,000 for speaking engagements (not for electioneering). But for all his blatherings on the campaign trail for the Republican presidential nomination, the Donald (as he is sometimes referred to) doesn’t talk very much about his very chequered business career. Makes him well-equipped to be president and run the multitrillion-dollar US economy. — Glenn Dyer
Maccas still flagging. Despite more changes in menus, store closures, job losses and executive changes, McDonald’s continued to struggle in the June quarter, reporting a bigger than forecast fall in same-store sales in the US and parts of Asia, which helped push earnings lower (assisted by the strong US dollar). Same store sales fell 2% in the US, 4.5% in China and Japan, rose 1.2% in Europe, but were down 0.7% across the world in the quarter, with analysts forecasting a 0.4% fall. It’s more bad news as consumers, especially in the US, abandon Maccas for other burgers/fast food. And still on fatty foods, Coca-Cola did better in the third quarter in the key US market, except for its No. 2 brand, Diet Coke, which had another slide in sales volume. This quarter, the reported drop was 7%, after a 6.6% drop in volume in 2014 (when Pepsi moved past it into the No. 2 slot in US carbonated drinks rankings). — Glenn Dyer
Australia does it for Germany. Mercedes luxury cars are not only the bee’s knees for the upwardly mobile in Australia (we reported earlier this month that sales in the first six months of the year had jumped more than 19%, making it the leader of the upmarket segment in this country. Overnight, the company revealed a 14% rise June quarter sales of cars and trucks. Sales of Merc cars jumped 20% to 500,700 in the quarter, revenue was up 19% to 37.5 billion euros and profits were up 8% to 2.37 billion euros. While sales in China and the US remained solid, sales in western Europe picked up (especially of its trucks). Australia leads the way, again? — Glenn Dyer