Amazon’s First-Quarter Revenue, Profit Beat Estimates

Amazon on Thursday reported first-quarter revenue and profit above expectations as sales at its retail and cloud-computing businesses increased, sending shares up more than 4 percent in extended trading.

The world’s largest online retailer said net income rose 41 percent to $724 million, or $1.48 per share, marking the eighth straight quarter that Amazon – known for its heavy spending and roller-coaster results – has posted a net profit.

Analysts on average had expected a profit of $1.12 per share, according to Thomson Reuters.

The company’s total net sales rose 22.6 percent to $35.71 billion, slightly ahead of analysts’ average estimate. Revenue has soared in recent years as more shopping has shifted online and businesses moved their IT to the cloud, benefiting Amazon Web Services (AWS).

Sales from AWS, the company’s fast-growing business to host companies’ data and handle their computing in the cloud, rose 42.7 percent to $3.66 billion, matching the average analyst estimate, according to market research firm FactSet StreetAccount.

Shares of the company are up 3.8 percent to $953.

Amazon’s net sales in North America, its biggest market, jumped 23.5 percent to $20.99 billion in the latest quarter.

The company also said a stronger dollar hurt its overall sales by $492 million and that the quarter faced tough comparisons with the year-ago quarter, when the Feb. 29 leap day gave shoppers an extra 24 hours to spend.

Seattle-based Amazon forecast that operating income in the second quarter would be between $425 million and $1.075 billion, below the consensus estimate of $1.46 billion, according to market research firm FactSet StreetAccount.

That may be from ongoing investments, stepped up from a year ago to help Amazon stay ahead of the competition.

Amazon has said it plans to build new warehouses and create more than 130,000 full-time and part-time jobs by mid-2018 to speed up delivery. It is investing more than $5 billion in India to gain market share.

The company is also racing to make its voice assistant Alexa, which competes with Apple’s Siri, a ubiquitous platform like Windows has been for desktop or Android has been for phones.

Amazon forecast sales for the second quarter of between$35.25 billion and $37.75 billion, which includes an unfavorable impact of about $720 million from foreign exchange rates.

Analysts on average had expected revenue of $36.87 billion.

(Reporting by Anya George Tharakan in Bengaluru and Jeffrey Dastin in San Francisco; Editing by Savio D’Souza, Bernard Orr)

image by formatc1

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