Amazon.com Inc (AMZN.O) on Thursday reported profit and revenue that blew past analysts' expectations, sending its shares soaring in after-hours trading and demonstrating the growing market power of its core retail business and new cloud services division.
The results are a 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. Shares of the world's biggest online retailer jumped nearly 13 percent to $679 in extended trading on Thursday.
Amazon's performance also assuaged concerns about a broader slowdown among tech and internet companies after Apple (AAPL.O), Microsoft (MSFT.O) and Intel (INTC.O) all reported disappointing earnings.
While Amazon displayed impressive growth for a company its size - revenues rose 28.2 percent to $29.13 billion - its Amazon Web Services cloud computing division was the highlight with revenues climbing 64 percent to $2.56 billion while operating income more than tripled to $604 million.
Even though operating margins fell at the unit compared to last quarter, as Amazon spends heavily to compete with rivals like Microsoft and Google (GOOGL.O), they remain a healthy 27.9 percent. That compares to 28.5 percent last quarter, and 16.9 percent a year earlier.
Amazon has seen strong growth in subscribers to its Prime loyalty program, which offers one-hour delivery, original TV programming and access to its digital entertainment products such as Prime Music and Prime Video for an annual fee of $99.
The company recently launched a monthly subscription to the program for $10.99. Amazon has also said it plans to offer its video streaming service for a monthly fee of $8.99.
Amazon's net sales in North America, its biggest market by revenue, increased 26.8 percent to $17 billion in the first quarter.
Amazon reported net income of $513 million, or $1.07 per share, for the quarter ended March 31. The company had a loss of $57 million, or 12 cents per share, a year earlier.
Analysts on average had expected a profit of 58 cents per share and revenue of $27.98 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Narottam Medhora in Bengaluru; Editing by Kirti Pandey, Jonathan Weber and Bernard Orr)
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Updated Date: Apr 29, 2016 03:00 AM