4 key takeaways from Amazon’s Q1 earnings report

Amazon Inc. (NASDAQ: AMZN) reported its financial results for the fiscal first quarter on Thursday that topped analysts’ estimates for earnings and revenue.

1. Financial performance

According to Refinitiv, experts had forecast the company to print £74.92 billion of revenue in the first quarter. Their estimate for per-share earnings stood at £6.84. In its report on Thursday, Amazon topped both estimates posting a higher £77.82 billion of revenue and £11.32 of earnings per share in Q1.

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The American multinational’s revenue climbed by 44% in the recent quarter on a year over year basis. Amazon’s sales blew past £75 billion for the first time in the prior quarter (Q4).

2. Revenue from individual business segments

Other notable figures in Amazon’s earnings report on Thursday include £9.68 billion of Amazon Web Services net sales – a 32% annualised growth. The tech giant said its revenue from its “Other” category also jumped 77% in the first quarter to £4.95 billion. Revenue from physical stores, including Whole Foods markets, tanked 16% in Q1 to £2.80 billion.

According to CEO Jeff Bezos, more than 175 million Prime Video members streamed movies and TV shows last year. Streaming hours, he added, were up over 70% compared to the previous year. Amazon now boasts 200 million Prime subscribers in total.

3. Guidance for the fiscal second quarter

For the fiscal second quarter, Amazon now forecasts its revenue to fall in the range of £78.89 billion to £83.19 billion. Wall Street estimate, on the other hand, is capped at £77.88 billion. Prime Day, Amazon added in its guidance, will be in June this year. Operating income in Q2 is expected between £3.23 billion and £5.74 billion. Earlier this week, the Seattle-based firm said it will raise wages for over 500 thousand workers.

4. James Cakmak’s comments on Amazon’s earnings report

James Cakmak, partner at Clockwise Capital, commented on Amazon’s earnings report on CNBC’s “Closing Bell” and said:

“Amazon was the most underperforming stock across the big-tech. This was the only stock across big-tech that actually saw its sales see multiple declines over the last year. I think what you’re seeing now is a lot of catch up. If you drill down on numbers, yes, the retail numbers were extremely strong, but online sales were up 15%, and you aren’t seeing deceleration in AWS. So, those were the things to look at a little bit further.”

Impact on the share price

Amazon shares jumped roughly 5% in after-hours trading on Thursday to hit a record high of £2,616. In comparison, the stock had started the year at £2,285 per share. At the time of writing, Amazon is valued at £1.26 billion and has a price to earnings ratio of 83.