Shares of Amazon.com Inc. surged Thursday after the e-commerce powerhouse reported better-than-expected first-quarter results fueled by a 28 per cent jump in revenue.
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Amazon released their fiscal first-quarter earnings report on Thursday, reporting net revenue of $29.1 billion, up twenty-eight percent from compared to the same time past year.
For the current quarter, Amazon expects sales between US$28 billion and US$30.5 billion, implying a growth of 21% to 32% from a year ago.
The cloud division’s sales jumped 64% to US$2.57 billion – less than one-tenth of Amazon’s overall revenue. The company had a loss of US$57 million, or 12 cents per share, a year earlier.
Since going public in 1997, Amazon has traditionally re-invested its earnings back into the business, which prevented the company from posting substantial profits. After expenses, AWS was responsible for $604 million in operating income, up over 200% from the same quarter previous year.
Sales for the Seattle-based company were $29.1 billion, up 28% and topping analysts’ forecasts of $28 billion.
“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter a year ago”, chief executive Jeff Bezos said. The results beat analysts’ expectations by a wide margin.
Amazon also said it had seen strong growth in subscribers to its Prime loyalty programme, which offers one-hour delivery, original TV programming and access to music and video products, for an annual $99 fee in the United States, or £79 in the UK.
The company has also been building loyalty with its Amazon Prime subscription service, which provides access to its online video and music as well as fast delivery for most items.
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Consumer Intelligence Research Partners says that the program has an estimated 54 million members in the U.S. While Amazon has not revealed the numbers on Prime subscribers, the membership could well command hefty revenue from subscription fees of $99 a year and $10.99 a month. “We think there is a lot of room to grow not only our worldwide countries, but also in the USA, we continue to build the benefits of the prime program”, said CEO Jeff Bezos. The company’s retail sales in North America jumped 27 percent to nearly $17 billion for the quarter, while its global retail sales rose 24 percent to $9.57 billion.
