Amazon’s shares soared over 6 percent in after-hours trading, following a substantial earnings beat and a forecast for current-quarter growth that would defy all expectations. Despite some notable criticism from the White House over the previous quarter, Amazon reported first-quarter earnings of $3.27 per share on sales of $51 billion. Those numbers are significantly better than what analysts expected, and up 43 percent from the same quarter last year.
Sales from Amazon’s Web Services division drove much of the growth, as they were up 49 percent to $5.4 billion. AWS drives much of Amazon’s profit, as the retail arm operates on such thin margins. Revenue from subscriptions, which primarily means Amazon Prime, were also up 56 percent from a year earlier, with revenue of $3.1 billion reported. CEO Jeff Bezos recently revealed that the company has now surpassed 100 million Prime members.
“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” said Bezos in a prepared statement. “As a result, the AWS services are by far the most evolved and most functionality-rich.”
Amazon’s forecast for the second quarter got investors even more excited. The company is forecasting operating income of $1.1 billion to $1.9 billion on revenue of $51 billion to $54 billion. Analyst consensus estimated operating income of $1.13 billion of operating income and sales of $52.3 billion.
Much of Amazon’s revenue increase can be explained by its acquisition of Whole Foods. However, international sales were also up a significant 34 percent to $14.8 billion, showing that Amazon continues to drive new growth in expanding markets.