Economy

Amazon Blows Past Q1 Earnings Estimates With Record Profit of $3.6 Billion

Amazon Blows Past Q1 Earnings Estimates With Record Profit of $3.6 Billion

Amazon did not say when it plans to offer Prime one-day shipping. Chief Financial Officer Brian Olsavsky made the announcement Thursday during Amazon's first quarter earnings call, as $3.6 billion in profit on almost $60 billion in sales was revealed.

Amazon, which hooked shoppers on getting just about anything shipped in two days, said this week that it will soon promise one-day delivery for its U.S. Prime members on most items.

Amazon Web Services crossed the $30 billion run rate threshold in the first quarter of 2019 as the cloud division of the e-commerce giant became more profitable by engineering its data centers to be more efficient.

Olsavsky didn't offer a timeline for the project's rollout, which will begin in the United States, saying, "We expect to make steady progress quickly and through the year".

The initiatives reflect how the world's largest online retailer has long invested in still-untested technology and programs, like its $13.7 billion purchase of Whole Foods Market to bolster home grocery deliveries.

The company already offers one-day shipping to Prime members, but it is only available in certain markets and often comes with an additional cost.

"While AWS's momentum continues unabated and is clearly the bigger driver of this profit story at the moment, the advertising flywheel now appears to be in full effect for Amazon and will only be a bigger part of the growth story over the near term", Lipsman said.

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Sales in Amazon's "other" segment, which is mostly advertising, increased 34 per cent, to 2.72 billion. It has expanded its fleet of jets, has plans to open package sorting hubs at two airports and launched a program a year ago that allows contractors around the country to deliver Amazon packages in vans stamped with the Amazon smile logo.

In the same time a year ago, it reported net income of US$1.63b.

In the first quarter sales rose 17% to $59.7bn.

Still, Amazon said that it expects to spend $800 million in this year's second quarter to speed up deliveries.

Research firm eMarketer estimates that Amazon holds nearly half of the U.S. e-commerce market, which is set to grow 20 per cent to US$282.5 billion ($402.6 billion).

Advertising is still a bright spot for Amazon, and a core focus for the company as it builds the marketing technology infrastructure so brands can sell their goods on its platform. The cloud businesses's operating income came to $2.2 billion for the quarter. Analysts had expected earnings per share of $4.72.