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Amazon, the world’s largest online retailer, saw its shares jump 10 per cent in after-hours trading on Tuesday after it raised its full-year sales and earnings forecast following a stronger- than-expected performance in the first quarter.
Net income during the quarter more than doubled to $111m, or 26 cents per diluted share, while sales rose 32 per cent to $3.02bn on the same period last year.
During the quarter Amazon reduced its rate of spending on new technology and content as expected following a spike in expenditure linked to the launch of its digital film downloading platform last year.
While the total spending of $167m represented a 20 per cent rise on the same period last year, this was 5.5 per cent of total sales, compared with 6.1 per cent last year.
The retailer also continued to expand its non-media sales, which rose 48 per cent to $947m. Non-media sales accounted for 31 per cent of worldwide sales, against
28 per cent a year ago.
During the quarter, Amazon’s US site launched a separate online shoes and accessories site, Endless.com, and continued to expand in other categories, such as groceries.
It also launched a sports and leisure store on its UK site, and a new toy store on its French site.
The company saw more growth in its web services operations, with more than 240,000 web developers now using storage capacity on Amazon’s servers.
Jeff Bezos, chief executive and founder, again highlighted the growth of the company’s Amazon Prime service, which offers unlimited express shipping for an annual membership fee. He declined to speculate on whether the service would be expanded to Amazon’s international sites.
The company said free cash flow was $521m for the trailing 12 months, up
4 per cent on last year.
It raised its revenue outlook for the year to a range of $13.5bn-$14bn, from an earlier estimate of $13bn- $13.7bn. It lifted its operating income expectations for the full year to $463m-$593m, up from an earlier $355m-$505m.