E-commerce giant Amazon reported a significant jump in profit tonight to soar past average analyst expectations, in addition to matching estimates on revenue.
The company’s net income for the first three months of 2019 more than doubled year-on-year to reach a record $3.6bn (£2.8bn), or $7.09 per share, compared to the average estimate of $4.72.
Sales reached $59.7bn for the quarter, meeting estimates according to Refinitiv. Revenue growth came in at 16.9 per cent compared to last year, the firm’s slowest rate in four years.
Amazon also fell short in its outlook for next quarter, predicting profit of up to $3.6bn compared to expectations of $4.2bn, according to Factset. The results left investor reaction muted, with shares rising little more than two per cent in extended trading.
The firm’s money-making cloud platform Amazon Web Services continued to post significant growth as sales rose 41 per cent to $7.7bn, though this was slower than last year’s 49 per cent growth rate.
Operating costs rose 12.6 per cent to $55.3bn, after investing in electric car startup Rivian and increasing spending on its Prime programme and original video content.
Amazon is sizing up to competition from Apple, Disney and Netflix, with plans to develop a Lord of the Rings prequel series.
"We believe that the company remains strongly positioned for the long term with unassailable competitive positions in its existing large and growing markets," said Christopher Rossbach, chief investment officer at J.Stern & Co.
"[Chief executive] Jeff Bezos’ bold moves into new trillion-dollar markets such as healthcare and grocery can replicate the success that it have had in cloud computing and advertising and become very material over time."