April 28, 2016 Last Updated 4:45 pm

Amazon posts strong earnings, revenue grows 28%

Amazon Web Services accounted for $2.57 billion in revenue, making it now on track to be a $10 billion business for Amazon, and one that certainly helped drive its $1.1 billion in operating income in Q1

The online retailer Amazon, like Facebook, did not fail to record record revenue. In other words, no Apple-like slow down for Jeff Bezos’s company.

Amazon’s earnings reports are always a bit of a tough nut to crack, with lots of new products touted, but few hard numbers for such things as tablet sales. But the numbers that Amazon did reveal were certainly impressive.

Net sales increased 28 percent to $29.1 billion in Q1, compared with $22.7 billion in first quarter 2015, and operating income was $1.1 billion in the first quarter, compared with $255 million in same quarter last year. Those are wow numbers.

new-amazon-fire-tvInvestors love the news, driving the stock up nearly 12 percent in after hours trading.

As usual, however, the quote from the CEO was rather odd.

“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts. We’re building premium products at non-premium prices, and we’re thrilled so many customers are responding to our approach.”

OK, well, since Amazon floods its customers with sales pitches for its own products one could guess that its own product would do well.

No matter, that is a minor detail. What has shareholders happy is that the company is now running solidly in the black after so many quarters where shareholders if they would ever be rewarded for their patience. Yes, revenue was growing, but when would those revenue gains translate into profits?

The answer is now, apparently.

Leading the way is cloud services, which continue to grow. Amazon Web Services recorded $2.57 billion in revenue in the first quarter, meaning that it is now a $10 billion business annually.

Also, Amazon continues to grow its North American business. Business in the Americas was up 27 percent (Apple’s biz fell 10 percent). All-in-all, if you own Amazon stock you have to be feeling pretty good right now. I don’t, however, but I do own a retirement account, so if Amazon helps drive up the market tomorrow then good.

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