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Amazon CFO bullish on international business


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Amazon CFO bullish on international business Inc.'s CFO is bullish on the company's international business, even though the e-commerce giant posted another operating loss in the division for the second quarter.

Amazon posted its highest ever quarterly net profit and a diluted EPS that came in well over analyst expectations for the second quarter. Only one of its divisions — international — reported a net loss at $494 million for the quarter ended June 30. Sales at the division rose to $14.61 billion from $11.49 billion over the same period. This past quarter does represent an improvement from the second quarter of 2017 when the company's international operations reported an operating loss of $724 million.

"We're very bullish on our international business," Amazon CFO and Senior Vice President Brian Olsavsky told analysts on a July 26 call.

Amazon has been trying to boost its presence in several international markets. Olsavsky pointed to the potential of India, where the company has had a presence for five years. Olsavsky claims Amazon is the country's most visited site. The fast-growing Indian e-commerce market has also attracted Walmart Inc. with its $16 billion deal to buy control of Amazon's Indian rival Flipkart Online Services Pvt. Ltd.

"We've seen good traction there," the CFO said.

Device launches and Prime benefits remain key strategies for attracting business in international markets, Olsavsky said. Amazon plans to offer Prime Day to Australia, Singapore, the Netherlands and Luxembourg. The company has introduced Echo Spot devices to India and Japan, and plans to expand Echo and Alexa to Italy, Mexico and Spain.

"We do realize it's a period of investment," Olsavsky said.

Back at the company's North American division, where it posted second-quarter operating income of $1.84 billion on sales of $32.17 billion, Amazon will spend part of its third quarter prepping for the upcoming holiday shopping period, Olsavsky said. Part of this preparation includes building out the company's warehouse and fulfillment capabilities, which Amazon expects to do at a slower pace than previous years. Amazon added square footage exceeding 30% growth in 2016 and 2017.

"We anticipate it's going to be lower this year as we get some efficiencies off what we've built over the last few years," Olsavsky said.