Amazon’s profit doubles

Amazon has reported a 43 per cent increase in net sales in the first quarter to US$51 billion, compared with $35.7 billion in the first quarter 2017, topping analysts’ expectations of $49.8 billion and boosting its share price 6 per cent in extended trading.

Excluding the $1.6 billion favourable impact from year-over-year changes in foreign exchange rates throughout the quarter, the e-commerce giant’s revenue increased 39 per cent compared with first quarter 2017.

The results were driven by Amazon’s profitable cloud computing business, strong advertising sales and better-than-expected retail performance, particularly in the US, where the acquisition of Whole Foods boosted sales in that segment 46 per cent year-on-year to $30.7 billion in the quarter, according to Brian Olsavsky, Amazon’s chief financial officer, on a call with analysts.

The company could see further gains from its US retail business, after announcing Thursday that it plans to increase the annual price of Prime memberships from $99 to $119 in May. Amazon CEO Jeff Bezos recently revealed there are more than 100 million Prime members worldwide.

The e-commerce giant increased its operating cash flow 4 per cent to $18.2 billion for the trailing twelve months, compared with $17.5 billion for the trailing twelve months ended March 31, 2017.

Operating income increased 92 per cent to $1.9 billion in the first quarter, compared with operating income of $1 billion in first quarter 2017. And net income was $1.6 billion in the first quarter, or $3.27 per diluted share, compared with net income of $724 million, or $1.48 per diluted share, in first quarter 2017.

Looking ahead, the retail giant expects net sales in the current quarter to be between $51 billion and $54 billion, which would be 34 to 42 per cent higher than net sales in the second quarter 2017. This guidance anticipates a favorable impact of approximately $1.2 billion or 320 basis points from foreign exchange rates.