Amazon’s growth may be slowing but its profit margins are rising.
The online giant easily blew past analysts’ first-quarter earnings expectations, reporting net income of $3.56 billion — more than double compared to the year-ago period — and earnings per share of $7.09 for the period ended March 31. Analysts had expected earnings per share of $4.72. Amazon’s operating income was $4.4 billion, which reflected a record 7.4% margin.
Net sales increased 17% to $59.7 billion in the quarter, just beating expectations, compared to $51.0 billion in the year-ago period. It was the company’s slowest revenue growth in some four years.
In North American, revenue rose 17% compared to an increase of 46% in the year-ago period. Internationally, sales rose 9% compared to 34% last year.
Amazon’s cloud computing service (AWS) remains the company’s stellar performer. Its revenue rose 41% to $7.7 billion compared to a 49% gain last year.
“Amazon has kicked off its fiscal year with a solid set of results which signal its continued market share advance into both the product and services sectors,” said Neil Saunders, managing director, GlobalData Retail. “However, there is no disguising the slower pace at which the company is moving forward. The days of stellar uplifts have long since disappeared and it is clear that Amazon is now in a different era – one characterized by more modest gains.”
Amazon gave second-quarter revenue guidance in the range of $59.5 billion and $63.5 billion, compared to a consensus of $60.88 billion from analysts.