Amazon’s profit more than 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.

Operating income is expected to be between $1.1 billion and $1.9 billion, compared with $628 million in second quarter 2017, assuming, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.
This story first appeared on sister site Inside Retail Australia.

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