Amazon’s first-quarter net profit more than tripled on the back of strong revenue growth as the Covid-19 pandemic boosted online shopping globally.
The Seattle-based e-commerce company’s net profit surged 224 per cent yearly to $8.1 billion in the three months ending March 31.
Revenue during the period increased 44 per cent to $108.5bn, beating analysts' average estimate of $104.4bn.
The company's stock was up by more than 3.7 per cent to $3,601 a share in after-hours trading. The share price has increased more than 40 per cent in the past year.
Amazon’s operating income surged more than 122 per cent from the prior year to $8.9bn in the first quarter.
Amazon Web Services, the company’s subsidiary providing on-demand cloud computing platforms to other businesses, saw good momentum in sales during the pandemic.
Its revenues reached $13.5bn in the first quarter, rising annually by more than 32 per cent.
“AWS has become a $54bn annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating,” said Jeff Bezos, Amazon founder and chief executive.
“Companies from Airbnb to McDonald’s to Volkswagen come to AWS because we offer what is by far the broadest set of tools and services available.
"We continue to invent relentlessly on their behalf."
In its second quarter sales guidance, Amazon expects revenues to hover in the range of $110bn to $116bn, soaring between 24 per cent and 30 per cent compared with the same period a year earlier.
Operating income is expected to be between $4.5bn and $8bn in three months to June 30, the company said.
From January to March, sales at the company’s online stores grew 44 per cent to $52.9bn. Whereas, physical store sales dropped by 16 per cent yearly to $3.9bn.
The Covid-19 pandemic has increased the trend of online shopping as users avoided using cash to stem the spread of virus.
E-commerce will account for more than half of the total growth for the global retail sector, or $1.4 trillion, in the next five years, Euromonitor International says.
Amazon’s subscription services sales rose almost 36 per cent to $7.5bn in the first quarter.
“As Prime Video turns 10, over 175 million Prime members have streamed shows and movies in the past year … and streaming hours are up more than 70 per cent year-on-year,” Mr Bezos said.
The "Other" category, which included sales from advertising, had an annual growth of 77 per cent in its revenues, to $6.9bn.
Amazon, which has more than 200 million paid Prime members worldwide, said it would spend more than $1bn on raising wages for more than half a million of its US operations workers.
The company’s chief financial officer, Brian Olsavsky, said the company aimed to increase spending on video content as consumers were watching content for more hours on Amazon.
