Amazon profit surges 31% as sales top expectations
James MartinAmazon posted first quarter earnings of $108 million, or 23 cents-per-share, and revenue of $19.74 billion on Thursday.
Wall Street was expecting earnings of 0.23 cents a share and a revenue of $19.43 billion. Amazon's share price rose nearly 4 percent Thursday, closing at $337.15 percent a share, just before the news hit.
The company's share price was down nearly 17 percent over the course of the quarter and had been dropping steadily since the middle of March. But, was up Thursday morning prior to the earnings, opening at $329.98.
Last year, during the same quarter, Amazon reported earnings of 82 million, or 18 cents a share, on revenue of $16.07 billion.
This quarter, investors were mainly looking at the growth on the company's retail side with a particular interest in how Amazon's subscription service fee increase may have affected the company, according to analysts.
Near the end of its first quarter, Amazon announced an increase fee for its Prime membership, a subscription service that includes free two-day shipping, and access to video streaming and the Kindle e-book library.
Prime is an integral part of Amazon's e-commerce business. It helps drive the purchases and Amazon is dedicated to making it attractive to customers.Last quarter, the company said the subscription covered the shipping of 19 million eligible Prime products. Earlier this month, the company announced that the number was now 20 million.
The membership fee increase, from $79 to $99, might have caused some customers to reconsider their memberships, but it is hard to tell if a significant amount of customers choose not to renew at the new rate since the new price took effect after March 31, when the quarter ended.
But analysts will likely still press Amazon to address the effect of the increase during the company's earnings call, scheduled to start at 2 p.m. PT.
Analysts will probably also ask about two other buzzworthy announcements made after the end of the first quarter, the launch of the Kindle Fire TV media streaming set-top box and Amazon's exclusive licensing deal with HBO. Amazon said the Kindle Fire TV sold out quickly on its site. Although the the HBO deal, announced Wednesday, was a significant win for Amazon, it's unclear if it will move the needle for consumers since the content available to Prime members is still limited. Both developments show Amazon's dedication to being a major player in video content.
This story is developing.
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