Amazon's earnings surprise shoots its shares higher
SEATTLE - Amazon (AMZN) reported a surprise second-quarter profit Thursday on continued strength of its cloud-computing business and strong revenue both domestically and abroad.
Shares jumped $81, or 17 percent, to $563 in aftermarket trading.
The quarterly results bucked Amazon's long-time strategy of investing the money it earns back into the company, resulting in quarterly losses or thin profits. But Amazon got a boost in revenue from Amazon Web Services, a suite of products and services offered to businesses by way of the "cloud," or remote servers that enable users to access applications on any machine with an Internet connection.
Revenue from the AWS business climbed 81 percent to $1.82 billion. Amazon only began breaking out results from that business during the first quarter.
Amazon also said its $99-a-year Prime loyalty program helped drive growth during the quarter. The company won't say how many Prime members it has, but it's estimated to be 35 to 40 million members, and Prime members typically spend more than other shoppers.
Last week, Amazon offered sales for one day to members only. Amazon said the Prime Day promotion helped drive 18 percent more sales than last year's Black Friday -- typically the busiest day in retail. The company also said it got hundreds of thousands of new signups from its Prime Day promotion. The second-quarter results do not include revenue from that day.
Net income was $92 million, or 19 cents per share, compared with a loss of $126 million, or 27 cents per share, a year earlier. The results surpassed Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for a loss of 15 cents per share.
The online retailer posted revenue of $23.2 billion in the period, also beating Street forecasts. Fifteen analysts surveyed by Zacks expected $22.3 billion.
For the current quarter ending in September, Amazon said it expects revenue in the range of $23.3 billion to $25.5 billion. Analysts surveyed by Zacks had expected revenue of $23.8 billion.
Amazon shares have climbed 55 percent since the beginning of the year, while the Standard & Poor's 500 index has increased 2 percent. In the final minutes of trading on Thursday, shares hit $482.18, an increase of 44 percent in the last 12 months.