Amazon smashes earnings expectations amid 44% sales increase
Amazon on Thursday reported its best first quarter ever as its earnings more than tripled over a year ago amid sustained strong demand for its goods and cloud-computing services.
The retail and tech giant, which confirmed in its guidance that Prime Day will take place during its second quarter, reported that its net income increased to $8.1 billion in the quarter ended March 31, or $15.79 per diluted share, compared with $2.5 billion, or $5.01 per diluted share, in the year-ago period. Analysts had expected earnings of $9.54 per share. (Amazon's profits in the year since the pandemic started have now exceeded $26 billion, more than the previous three years combined.)
Operating income increased to $8.9 billion, compared with $4.0 billion last year.
Amazon’s net revenue increased 44% to $108.5 billion, beating analyst expectations of $104.5 billion. The company reported year-over-year net sales growth of 40% in North America, compared to 29% in the year-ago period, and 60% growth internationally, up from 18% last year. Amazon Web Services growth was put at 32%.
North American e-commerce sales in the quarter totaled $64.37 billion, up from $46.13 billion a year. Operating profit from North American sales totaled $3.45 billion, up from $1.31 billion the year before.
First-quarter international sales totaled $30.65 billion, up from $19.11 billion a year ago. Amazon posted operating profit of $1.25 billion from international sales, after reporting a loss of $398 million in the year-ago period.
Sales at the company's brick-and-mortar stores, which include Whole Foods Market, Amazon Fresh, Amazon Go Grocery and Amazon Go, experienced a big drop, falling 16% in the quarter.
Amazon's cloud-computing business, AWS, remains a major profit center. It posted net sales of $13.5 billion in the quarter, up 32% from last year. AWS operating profit was $4.16 billion, up from $3.08 billion a year ago.
“In just 15 years, AWS has become a $54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating,” stated Jeff Bezos, Amazon’s founder and chief executive. Bezos is stepping down as chief executive in the third quarter, to be succeeded by Andy Jassy, CEO of Amazon Web Services. Bezos will become executive chair.
In other highlights from the quarter, the retailer said there are now more than 200 million paid Prime members worldwide. In the United States,
Amazon expects net sales in the second quarter to fall between $110.0 billion and $116.0 billion, or to grow between 24% and 30%, compared with the second quarter 2020.
The company released its first-quarter earnings on the same day it revealed that it would spend $1 billion to increase the pay of its more than 500,000 U.S. operations employees.