Amazon Web Services (AWS) represents that company’s fastest growing division, with revenue surging almost 64 percent to $2.57 billion.
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The e-commerce giant reported overall Q1 net income of $513 million, or $1.07 a share, a stark turnaround from the $57 million, or 12 cents a share, it lost this time previous year.
Amazon reported net income of $513 million for the quarter ended March 31st. Analysts had been expecting earnings of 58 cents per share on $27.98 billion in sales.
The continued success of Amazon Web Services (AWS) helped Amazon deliver strong first quarter results, which were also boosted by strong sales of its new Fire tablets.
Amazon shares are up over 12% in after-hours trading Thursday after the Seattle-based firm’s first quarter results easily beat expectations.
The results were in sharp contrast to the disappointing fourth quarter Amazon reported in January, which renewed worries among some shareholders about the company’s comparatively thin profit margins.
The cloud unit’s operating margin also jumped from 16.9 percent a year ago to 23.5 percent for the quarter.
Amazon said revenue in the current quarter is expected to be between $28 billion and $30.5 billion, with operating income between $375 million and $975 million.
AWS net sales grew 64% to $2.57 billion.
Founder and CEO Jeff Bezos said in a press release that Amazon.com’s devices such as the Fire tablets and the Fire TV Stick streaming media player are the top selling products.
This is not the first time that Amazon set up modest guidance for the first quarter and then proceeded to crush that easy target.
Walmart can take some solace in the fact its e-commerce growth rate of 15% was slightly better than Amazon’s. Analysts surveyed by Zacks had expected revenue of $US28.14 billion. The performance prompted investors to send Amazon shares shooting almost 13% higher in after-hours action. The company posted a net loss of 12 cents per share in Q1 2015.
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Amazon has also invested heavily in the day-to-day services that got the company where it is today. Over the years, it has managed to add more prime members and has allured more new customers with its high quality services and products.
