Amazon revenue beats, cloud computing more profitable than expected
NEW YORK (Reuters) – Amazon.com Inc’s first-quarter revenue grew more than expected as rising sales in North America and its burgeoning cloud-computing services unit offset new business investments.
The e-commerce company for the first time broke out financial details of its secretive cloud computing unit, Amazon Web Services, on Thursday, saying revenue jumped almost 50 percent to $1.57 billion, or about 7 percent of total revenue.
Chief Executive Jeff Bezos revealed in a statement that Amazon Web Services is a $5 billion business and its growth is accelerating.
Amazon is rapidly adding infrastructure and resources to its cloud computing business, Chief Financial Officer Tom Szkutak told reporters on a conference call.
Cloud computing has turned out to be more lucrative than expected, Wedbush Securities analyst Michael Pachter noted. “Amazon’s Web service is profitable, and apparently was a year ago as well. Everybody thought it was losing money … and is probably a bit smaller than people thought it was.”
Amazon’s sales from North America rose 24 percent to $13.4 billion in the quarter ended March 31, the company said.
The company’s shares rose about 2 percent in extended trading.
The international unit, which accounts for about 35 percent of total sales, remained a drag, with sales for the quarter slipping 1.77 percent to $7.75 billion.
Szkutak said the company has stepped up its investments particularly in India.
Amazon said it expected net sales to grow 7 to 18 percent in the current quarter to $20.6 billion to $22.8 billion.
The company forecast an operating loss of $500 million to an operating income of $50 million for the quarter.
Analysts on average were expecting second-quarter revenue of $22.11 billion, according to Thomson Reuters I/B/E/S.
Amazon reported a loss of $57 million, or 12 cents per share, for the first quarter compared with a profit of $108 million, or 23 cents per share, a year earlier.
Revenue rose 15 percent to $22.7 billion.
Analysts on average had expected a loss of 12 cents per share and revenue of $22.39 billion. – REUTERS