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Amazon jumps after smashing earnings

Eugene Kim

Amazon reported a huge beat across the board for its first-quarter earnings on Thursday, with particular growth coming from its AWS cloud service and advertising business.

Amazon stock is up roughly 7 percent in after-hours trading, soaring past its all-time high.

Here are the most important numbers:

  • Revenue: $51.04 billion vs. $49.78 billion, as estimated, according to Thomson Reuters
  • EPS: $3.27 per share vs $1.26 per share, as estimated, according to Thomson Reuters
  • AWS revenue: $5.44 billion vs. $5.25 billion, as estimated, according to FactSet

Amazon's revenue, which includes sales from Whole Foods, increased 43 percent year-over-year. Its North America revenue jumped 46 percent to $30.7 billion, while international sales grew 34 percent to $14.8 billion.

Net income more than doubled to $1.6 billion, underscoring the company's renewed focus on growing profit margins.

AWS sales grew 49 percent year-over-year, reaccelerating its growth rate, which had dropped to as low as 42 percent in the third quarter of last year. It generated $1.4 billion in operating income, accounting for 73 percent of Amazon's total operating income.

In a prepared statement, Amazon CEO Jeff Bezos highlighted the massive success of AWS.

"AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down," said Bezos. "As a result, the AWS services are by far the most evolved and most functionality-rich."

Amazon's "other" revenue, which primarily comes from its advertising business , saw a whopping 139 percent increase from last year, generating $2.03 billion in sales.

Its subscription services revenue, which includes Prime memberships, also grew 60 percent to $3.1 billion. Amazon disclosed for the first time last week that Prime had more than 100 million members worldwide .

Separately, Amazon also announced it would raise the price of Prime membership by 20 percent to $119 a year. It also extended its streaming partnership with the NFL until 2019.

Amazon gave second-quarter revenue guidance in the range of $51.0 billion to $54.0 billion, in-line with street estimate of $52.2 billion. Operating income is expected to fall between $1.1 billion and $1.9 billion, far-exceeding the $1.01 billion street estimate.

"At first glance, we are quite frankly flabbergasted by Amazon's 1Q 2018 results," Anthony Chukumba of Loop Capital wrote in a note after the earnings.


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