Amazon’s Q1 Revenue Beats Expectations, Projects Q2 Operating Loss
Amazon’s first quarter revenue beat Wall Street expectations, sending shares up close to 2 percent higher in after hours trade.
But it forecast a second quarter operating loss while most analysts projected an operating profit in the current period.
Amazon earned 23 cents per share on $19.7 billion in revenue in the first quarter, matching analyst estimates for earnings and beating the average estimate of $19.4 billion in revenue. But the company said it projected an operating loss of $55 million to $455 million in the second quarter while analysts had been projecting operating income of $537 million.
Now on to the media and analyst calls to hopefully get some color on the effect of sales tax collection on the company, growth of Amazon Web Services and more. I’ll update as I gather more information.
Update 4:55 pm ET: Sure enough, one of the first questions on the media call was about the effect of sales tax in the states in which Amazon is now required to collect it on sales. CFO Tom Szkutak said the company has collected sales tax or the international equivalent for some time now on more than 50 percent of sales and has continued to grow at a nice clip in spite of that fact. So if it is having any negative impact on the business, as a recent research report suggested, Amazon isn’t saying.
As for AWS, the company continues to avoid giving specific revenue numbers for the division, instead including it in the “other” revenue category along with advertising revenue and revenue from Amazon co-branded credit cards. Together, revenue for that line item grew 58 percent to $1.26 billion in the quarter. Szkutak would only say that AWS is responsible for “a big part of that,” but based on research firm estimates of the size of the other two businesses in the “other” category, it’s reasonable to think AWS revenue totaled in the high nine figures in the first quarter.
Lastly, several analysts asked Szkutak about how the recent price increase of Amazon Prime is affecting membership. The CFO spoke only in general terms, referring to the early data on customer retention and signup as “encouraging,” but acknowledged that it is way too early to know for sure. Amazon started raising the price of Amazon Prime on membership renewals just last week.