18 July 2019
Amazon continues to invest in a wide array of areas as it seeks to further grow its retail and cloud business. Photo: Reuters
Amazon continues to invest in a wide array of areas as it seeks to further grow its retail and cloud business. Photo: Reuters

Amazon Q1 profit more than doubles, beating forecasts

Amazon reported on Thursday that its profit more than doubled in the first quarter compared to the same period last year, surpassing analyst forecasts, as the company continued its relentless march in online retail and cloud computing.

The world’s largest online retailer said net income rose to US$1.6 billion, or US$3.27 per share, in the three months ended March, compared with US$724 million a year earlier.

Analysts on average were expecting US$1.26 per share, according to Reuters.

Sales rose 43 percent to US$51 billion in the quarter, beating analysts’ average forecast of US$49.8 billion. 

Prime, Amazon’s loyalty club that includes fast shipping, video streaming and other benefits, has been key to the jump in revenue, Reuters noted.

The company now has more than 100 million Prime members globally.

Amazon announced Thursday that it is increasing the price of an annual US Prime membership to US$119 from US$99 starting May 11 for new members and June 16 for renewing members.

The Seattle-based firm acquired Whole Foods Market for US$13.7 billion last year to help it send groceries to shoppers’ doorsteps.

Revenue from third-party sellers paying to promote their products on was an unusually large bright spot during the first quarter, Reuters said.

Advertising and “Other” sales, including from co-branded credit cards, grew 139 percent to US$2.03 billion.

Amazon Web Services, which handles data and computing for large enterprises in the cloud, saw its profit margin expand in the quarter.

The division posted a 49 percent rise in sales from a year earlier to US$5.44 billion.

“That business continues to grow very well and has seen great customer adoption,” Brian Olsavsky, Amazon’s chief financial officer, said on a call with reporters.

Amazon continues to invest in a wide array of areas. The company plans to spend more on video content this year.

Amazon and the US National Football League announced a deal to stream Thursday night games during the 2018 and 2019 seasons on Amazon’s Prime Video.

For the current quarter, Amazon projected operating profit in the range of US$1.1 billion and US$1.9 billion, up from US$628 million a year earlier.

Amazon shares rose 6 percent in after-hours trade, hitting a new all-time high, following the strong first-quarter results and the positive forward guidance.

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