Amazon creates record profit

The online retailer shows no weakness before Jeff Bezos’ retirement – and clearly exceeds expectations. The Group’s cloud services are becoming increasingly important.

Parcels with the Amazon logo in a packaging warehouse of the group

Amazon.com continues its rapid growth. The online retailer has significantly exceeded expectations with its figures for the first quarter presented on Thursday after the market closed. The share price rose at times in after-hours trading by four percent. The share has gained almost 50 percent in value in the past twelve months.

Overall, Amazon increased its sales by 44 percent to 108.5 billion dollars. Analysts had expected an average of 104.5 billion dollars. Net income more than tripled to $ 8.1 billion, a record. Earnings per share of $ 15.79 were well above analysts’ guidance of $ 9.54.

Advertising revenue up 73 percent

Once again, Amazon Web Services (AWS), the cloud computing division that has become increasingly important for the group in recent years, did well. Its sales rose 32 percent to $ 13.5 billion. Amazon offers companies that want to relocate their information technology to the Internet, computer capacities and related services. The business is above average profitable and represents almost half of the operating profit. Amazon is primarily competing with Microsoft and Google, which in their quarterly reports this week also reported significant growth in their cloud activities.

In addition to AWS, Amazon also has other high-growth businesses outside of e-commerce. Online advertising, for example, is becoming increasingly important, where the company is competing with Google and Facebook. At Amazon, advertising revenue accounts for the majority of the “other sales” category, which grew 73 percent to $ 6.9 billion in the first quarter.

Amazon is considered one of the biggest winners of the corona crisis. The company reported a 38 percent jump in sales for 2020. It hired 500,000 additional employees over the past year. This pace of recruiting did not continue after the end of the Christmas business in the new year, however, in the first quarter the workforce even shrank by 27,000 to 1.27 million employees.

Amazon remains confident about further developments. Revenue growth of 24 to 30 percent was predicted for the second quarter, and Amazon has often significantly exceeded its own forecasts in the past. The group is facing a major turning point this year. In February, he announced that its founder, Jeff Bezos, would be stepping down as chairman of the board. Andy Jassy, ​​who has been in charge of the cloud business to date, has been appointed as his successor. The change should take effect in the third quarter. Bezos will continue to play a role as Executive Chairman at the top of the Board of Directors.