Amazon's profit more than doubles on cloud computing growth
NEW YORK (AP) — Amazon's push into advertising and cloud computing is paying off, helping the online shopping giant's first quarter profit more than double from a year ago.
The company has boosted its profits by expanding into businesses beyond selling goods online. Its cloud computing business, which powers the video-streaming site Netflix, digital scrapbooking site Pinterest and many other companies, saw its revenue soar 41% from a year ago. The area is getting more competitive: Microsoft has also been growing its cloud business, and both Amazon and Microsoft are vying for a multibillion contract with the U.S. military.
Amazon's fast-growing advertising business has also become big money maker, selling ads to companies that want their products to show up first when shoppers search on the site. Amazon doesn't say exactly how much its ad business makes, but lists it as part of its "other" revenue, which was up 34% from a year ago.
Overall, Amazon reported net income of $3.56 billion, or $7.09 per share, for the first three months of the year. That beat expectations of $4.61 per share, according to Zacks Investment Research.
In the same time a year ago, it reported net income of $1.63 billion, or $3.27 per share.
Total revenue rose 17% to $59.7 billion, which also beat expectations.
For the current quarter ending in July, Amazon said it expects revenue in the range of $59.5 billion to $63.5 billion. Analysts expected revenue of $62.53 billion.
Brian Olsavsky, Amazon's chief financial officer, warned in a call with reporters Thursday that the company's spending will likely rise this year as it hires more people and builds more warehouses where it packs and ships orders.
Shares of Seattle-based Amazon.com Inc., which are up 27% so far this year, were little changed in after-hours trading Thursday from their closing price of $1,902.25.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on AMZN at https://www.zacks.com/ap/AMZN