Amazon’s Q1 revenue and profits soar

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The company said revenue rose 16.9%

Amazon’s Q1 revenue and profits soar
SEATTLE — Amazon said its profits more than doubled in the first quarter, rising to $3.6 billion and topping the previous record of $3 billion set last quarter.

Amazon also announced that it plans to shift the core benefit of its Prime subscription program into free one-day shipping.

That news came during an earnings call with Amazon chief financial officer Brian Olsavsky on Thursday, shortly after the company reported its quarterly results.

“We’re currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program,” Olsavsky said. “We’re able to do this because we’ve spent 20-plus years expanding our fulfillment and logistics network. But this is still a big investment and a lot of work to do ahead of us.”

Amazon’s push for faster shipping has transformed the retail industry, with many competitors offering two-day delivery options. With the announcement, Amazon is upping the ante.

Amazon said revenue rose 16.9% in the quarter to $59.7 billion. That represents the slowest expansion since the first quarter of 2015. North American revenue increased 17% compared with last year’s 46% growth, while international growth dropped to just 9%, down from the previous year’s 34%.

Amazon’s cloud service continued its solid growth with a 41% sales increase, although that was down from last year’s 49% growth rate.

The wider margins come from growth in businesses such as cloud, advertising and third-party seller services, where profits are bigger but total sales are smaller.

Amazon said it expects second quarter profits in the range of $2.6 billion and $3.6 billion, below Wall Street’s consensus of $4.2 billion and indicating heavier investments, including the $800 million that Olsavsky said the company has allocated toward making free one-day delivery shipping the default for Prime members.

“We have a network tuned to two-day delivery right now, so we do need to build more one-day capacity with our transportation partners,” Olsavsky told analysts. “But we have a head start and we are moving quickly.”

Amazon in the first quarter teamed with General Motors to invest in electric pickup truck maker Rivian and invested in autonomous vehicle startup Aurora.



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