Amazon's AWS cash machine embiggens, breezes past $2bn-a-quarter mark
Bezos' biz bolstered by billowing clouds
Amazon has reported bumper first quarter results, with profits of $513m and sales increasing 28 per cent.
In its previous quarterly results Amazon's stock took a beating after the company reported a lower than expected sales. After Thursday's results, the company was back in favor and saw its stock price rise over 10 per cent to $674 – adding $6bn onto CEO Jeff Bezos' net worth. He owns 82 million shares in Amazon.
- Net income: Amazon made $513m in the first quarter of the year – the three months to March 31 – compared to a $57m loss this time last year.
- Net sales: Sales were up 28 per cent to $29.1bn for the first quarter. This would have been $210m higher if the strong dollar hadn't cost the company money. It is also about $2bn better than analysts' earlier estimates.
- North America net retail sales were $17bn, up 27 per cent from last year's $13.4bn. Operating income from NA retail was $588m versus $254m.
- International net retail sales were $9.566bn, up 24 per cent from last year's $7.7bn. International retail made a $121m operating loss versus last year's $194m.
- Amazon Web Services (AWS) raked in $2.6bn in revenue, up 64 per cent versus 2015's $1.6bn, and recorded an operating income of $604m versus $195m this time last year. AWS technically makes more money than Amazon's retail wing, but don't forget this is in terms of operating income, not net income, which hides various costs Amazon tucks into other lines on its financial tables.
- Overall operating income: Amazon reported income rising almost fourfold to $1.1bn, compared to $255m in the first quarter of 2015. Wall Street was expecting the figure to be $567m for Q1 2016.
- Earnings per share: Analysts had been expecting EPS to be around 58 cents but Amazon nearly doubled that, reporting an EPS of $1.07.
"Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year," said Bezos in a canned statement.
"Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can't yet manage to keep it in stock despite all efforts. We're building premium products at non-premium prices, and we're thrilled so many customers are responding to our approach."
A conference call to discuss the results will be held at 2pm Pacific Time today – we'll update you with more info when it's over. ®
Updated to add
Amazon is planning a big expansion of AWS, with 11 new availability zones planned for next year to augment the 33 currently available, CFO Brian Olsavsky reports.
"We are in a leadership position and we intend to maintain it," he said during the firm's results conference call. "But it's very early to get too confident."
AWS had grown 64 per cent on the year, he highlighted, and further strong growth was predicted. Amazon will also be making periodic price cuts were possible in the coming year.
He declined to break down the stats for different AWS products, other than the say that the Aurora database was the "fastest growing product in the service's history."
Amazon expects to bank an operating income between $375m and $975m in Q2; analysts are anticipating the figure to be $860m. AWS revenues for the year are also predicted to reach $10bn.