Amazon posted today first-quarter loss of 12 cents a share on revenues of $22.72 billion.
The results were in-line or slightly ahead of analyst expectations, who were guessing Amazon would post a loss of 12 cents a share on sales of $22.4 billion. In the same period last year, the Seattle e-commerce giant posted a profit of 23 cents on revenues of $19.7 billion.
As expected Amazon reported results for its cloud-computing business for the first time. In the first quarter, Amazon Web Services reported a profit of $265 million on revenues of $1.6 billion.
For the first time, Amazon investors and the public know exactly how the company’s cloud computing division is contributing to the overall business.
After Amazon’s shares fluctuated wildly for nearly an hour after the release came out, investors finally decided the announcement was positive: Shares are up almost 5 percent or $19 a share to trade at $409.46.
Leading into the big unveiling, analysts were looking at the event in two ways: It would reveal that AWS is profitable, which means the retail business is less profitable, or AWS is not profitable, which means the retail business is more profitable than they thought.
Given that AWS is reporting millions in profits, analysts may have questions about the efficiency of the retail side of the business.
“Amazon Web Services is a $5 billion business and still growing fast in fact its accelerating,” said Jeff Bezos, founder and CEO of Amazon.com, in a release. “Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence. We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term. We are so grateful to our AWS customers and remain dedicated to inventing on their behalf.”
Today’s results closely follows a strong fourth-quarter, in which Amazon surprised analysts by returning a profit, and crushing holiday expectations. Up until then, Amazon had been reporting deeper losses than expected.
Looking ahead to the second quarter, Amazon is predicting sales to fall between $20.6 billion and $22.8 billion, or to grow between 7% and 18% compared with second quarter 2014. Operating income is expected to fall between a loss of $500 million and a gain of $50 million, compared to a $15 million loss in the year-ago period. Analysts are forecasting revenues to come in on the high end of that range, or about $22.1 billion.
One thing closely watched is how fast Amazon is growing. For residents of Seattle, the changing skyline is one indication, but another is Amazon’s headcount. At the end of the first quarter, Amazon had 165,000 employees, up 32 percent year over year.