Amazon.com continues its rapid growth. The online retailer significantly exceeded expectations with its figures for the first quarter presented on Thursday after the close of the stock exchange. The share price rose at times by four percent in after-hours trading. The share has gained almost 50 percent in value over the past twelve months.
Overall, Amazon increased its sales by 44 percent to 108.5 billion dollars. Analysts had expected an average of 104.5 billion dollars. Net income more than tripled to $8.1 billion, setting a record. Earnings per share of $15.79 were well above analysts' forecast of $9.54.
Advertising revenue up 73 percent
Amazon Web Services (AWS), the cloud computing division that has become increasingly important for the Group in recent years, once again performed well. Its revenue rose by 32 percent to $13.5 billion. Amazon thus offers computing capacity and related services to companies that want to move their information technology online. The business is more profitable than average and accounts for nearly half of the company's operating profit. Amazon competes here primarily with Microsoft and Google, which also reported significant growth in their cloud activities in their quarterly reports this week.
In addition to AWS, Amazon has other high-growth businesses outside of online commerce. Online advertising, for example, is becoming increasingly important, and here the group competes with Google and Facebook. Advertising revenue represents the largest part of Amazon's "other revenue" category, which grew 73 percent to $6.9 billion in the first quarter.
Amazon is considered one of the biggest winners of the Corona crisis. The company already reported a 38 percent jump in sales for 2020. It hired 500,000 additional employees over the course of last year. However, this pace of recruitment did not initially continue in the new year after the end of the Christmas shopping season, and the workforce actually shrank by 27,000 to 1.27 million employees in the first quarter.
Looking ahead, Amazon remains confident. Sales growth of 24 to 30 percent was predicted for the second quarter, and Amazon has often significantly exceeded its own forecasts in the past. The company is facing a major break this year. In February, it announced its founder Jeff Bezos would step down as chief executive. Andy Jassy, who has led the cloud business until now, was appointed as his successor. The change is expected to take effect in the third quarter. Bezos, however, is expected to continue to play a role as executive chairman at the top of the board.
Photo by Christian Wiediger