Amazon has reported outstanding first quarter earnings for the year, beating Wall Street expectations. The increase in profits was mainly due to the increased sales in the North American retail market.
Amazon’s advertising business and cloud computing division incremented the company’s overall revenue. The e-commerce giant’s profit beat Wall Street estimations by $2 per share.
The company reported a whopping $51 billion. Analysts had predicted that its first-quarter revenue would be $49.96 billion. Furthermore, Amazon said EPS of $3.27 per share.
Analysts at Wall Street had expected Amazon’s EPS to be at $1.26 per share. The company’s stock, in after-hours trading, increased by $97.54 and reached to $1,615.50.
Investors were thrilled with the company’s performance and cheered Bezos. Amazon also revealed that its operating income in the first quarter of this year was $1.9 billion.
Previously, the company had estimated in February that its operating income for the first-quarter would be $300 million to $1 billion. Not only did Amazon beat analysts’ forecasts, but it even outdoes its profit predictions.
In a conference call with analysts, Amazon’s CFO Mr. Brian Olsavsky said that numerous factors played a vital role in increasing Amazon’s profit. He even said that Amazon had not expected such high revenues.
Adding further, Brian said that Amazon has worked on lowering the costs of operating its fulfillment centers as well as data centers. This has also contributed to an increase in the company’s revenues.
The CFO also said that in the last quarter of 2017, Amazon had a lot of inventory and the company was worried that it would cost too much to shift this inventory in different warehouses around the country. But as a result of an increase in demand and better than expected sales, the company did not have to shift the inventory and saved the cost of inventory transportation.
Olsavsky also confirmed that the company’s advertising business has thrived in the last quarter contributing significantly to its overall revenue and profitability. Amazon is also increasing the price of its Prime service.