Amazon shares rise as Q1 earnings beat expectations with 43% revenue surge

Jeff Bezos private jet frequents the Washington DC area

Amazon also said it will hike its Prime membership fee 20 percent to $119 (roughly Rs. 7,900) a year for new members beginning May 11. Amazon said it will be increasing its subscription price for Prime in the USA to $119 from May 11. The new price will apply to existing members' renewals starting June 16. "AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down", Bezos said.

The consensus estimate among analysts is for Amazon (AMZN) to post $49.9 billion in sales for the first three months of 2018, up almost 40% from the same period a year earlier.

Earlier this year, it increased the monthly rate to US$12.99 (NZ$18.40) a month from US$10.99 (NZ$15.60).

When asked about the accelerated revenue growth seen in North America for the quarter, Amazon Chief Financial Officer Brian Olsavsky said the general driver continued to be Prime and the Prime flywheel. Analysts on average were expecting US$1.26 per share, according to Thomson Reuters I/B/E/S.

However, the rise of the cloud business, Amazon Web Services, and other more-profitable initiatives like advertising has shown that as the company expands it can become more profitable. As for the company overall, it more than doubled its profits in the quarter to $1.6 billion-just under its record of $1.9 billion from the holiday fourth-quarter-as revenue surged about 43 percent. The retail giant said today that the price will go up to $120 per year, up from $100.

This is the second time Amazon has raised its Prime membership price since the service launched in 2005.

Operating income also spiked 92 percent, from $1.0 billion during 2017's Q1 to $1.9 billion this year's Q1.

Microsoft reported third-quarter financial results Thursday that surpassed analyst expectations, with profit of $7.4 billion (95 cents per share), up 35 percent from the same period previous year, on revenue of $26.8 billion, up more than 15 percent. It had a year-earlier profit of $724 million.

The company now has more than 100 million Prime members globally.

Revenue from third-party sellers paying to promote their products on Amazon.com was an unusually large bright spot during the quarter.

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