Amazon delivers hefty profits, led by web services
SAN FRANCISCO: Internet colossus Amazon reported that its quarterly profit more than doubled on soaring revenue from online commerce and cloud services.
The earnings beat market expectations and came with an announcement that Amazon is raising the annual Prime subscription rate in the US to US$119 from US$99, effective next month.
Prime has been a strong driver of Amazon revenue, but it has also heaped on costs as the company invests in logistics for deliveries and online content including original television shows, according to executives.
Amazon said it earned US$1.6 billion in the first three months of this year on revenue that soared to US$51 billion from US$36 billion in the same period last year.
Amazon shares climbed more than seven per cent to US$1,626 in after-hours trades that followed release of the earnings figures.
The Seattle-based firm spotlighted the juggernaut growth of its Amazon Web Services (AWS) division, which hosts services and content that companies use in the internet cloud.
AWS leads big-name rivals Microsoft and Google in the market that has boomed with the lifestyle shift to accessing movies, music, games and more from online devices.
“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” Amazon founder and chief Jeff Bezos said in the first quarter earnings release.
“That’s why you’re seeing this remarkable acceleration in AWS growth, now for two quarters in a row.” Amazon has also been investing aggressively in artificial intelligence to bolster its cloud services platform, with features like automated language translations, and building Alexa digital assistant software into cars, smart speakers and more.
Amazon also this week introduced a ‘Free Time’ version of Alexa that includes an Echo speaker for children.
This offers parental controls and family-friendly features including filtering out foul-mouthed songs, education answers, encouragement to use the word “please,” and blocked ability to buy things with voice commands.
Amazon introduced an Echo Dot Kids Edition for US$70 that comes with an unlimited family plan for a period.
Amazon reported sales from its online stores in the first quarter rose 18 per cent from the same period a year ago to US$26.94 billion.
Amazon has found success with its own streaming music and movie services, one of the perks of its Amazon Prime, which the company says now has 100 million members.
Streaming television is included in an Amazon Prime subscription service that also offers free, fast delivery of products purchased at the online retail powerhouse.
Amazon has been broadening its business by moving into new sectors, notably with the acquisition of the Whole Foods grocery chain. — AFP