Amazon Q1 profits surge

E-commerce giant Amazon.com posted its fourth straight profitable quarter, boosted by a 28 per cent sales increase and a surging growth in its Amazon Web Services division.

Amazon reported a net income of $513 million for the first quarter, or $1.07 per share, compared with the net loss of $57 million, or $0.12 per diluted share, in first quarter 2015.

The Seattle online retailer saw a 28 per cent increase in its net sales for the first quarter compared with the $22.7 billion in the previous corresponding period. Excluding the $210 million unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29 per cent compared to first quarter 2015.

“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 Jeff Bezos, founder and CEO of Amazon.com.

“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 five 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,” Bezos said.

Bezos added they are building premium products at non-premium prices, and they are thrilled many customers are responding to their approach.

Amazon’s retail business saw a 31 per cent increase for the quarter to $20.5 billion, up from the $15.6 billion from the previous corresponding period.

Amazon Web Services, with customers that include Netflix, Airbnb, Yelp and Expedia, saw a 63 per cent increase to $2.6 billion, up from the $1.6 billion from the same period the previous year.

For the second quarter of 2016, the company expects its net sales to be between $28.0 billion and $30.5 billion, or to grow between 21 per cent and 32 per cent compared with the previous corresponding period. Operating income is expected to be between $375 million and $975 million, compared with the previous period’s $464 million.