Amazon.com, Inc. (AMZN) didn’t leave anything to be desired with its first-quarter results, posted after the closing bell rang on Thursday.
The e-commerce giant posted a per-share profit of $1.07 on $29.1 billion worth of revenue — both well up from there year-ago comparisons of a loss of 12 cents per share and sales of 22.72 billion.
The numbers pretty much trounced analyst expectations as well. Professional stock-pickers we’re only calling for earnings of 58 cents per share of Amazon stock and revenue of $27.99 billion.
North American sales grew considerably, up almost 27% to reach $17.0 billion, driving $588 million worth of profit. Amazon Web Services (or AWS), however, grew at an even faster clip of 64% on a year-over-year basis. Revenue for that division was still a relatively small $2.57 billion, but it’s a very profitable division. AWS operating income grew to $716 million, almost rippling a year-ago operational bottom line for the cloud services unit.
E-commerce software developer ChannelAdvisor reckons the company’s same-store sales grew a little more than 16% on a year-over-year basis, jibing with the progress Amazon itself reported.
Also particularly impressive was the company’s operating income of $1.1 billion, roughly quadrupling the year ago operational bottom line. Overall net income rolled in at $513.0 million.
Of all the details CEO Jeff Bezos could have highlighted in his comments regarding his company’s Q1 numbers, he was most pleased with Amazon’s homegrown consumer devices, noting:
“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year. 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.”
Bottom Line for Amazon Stock
Looking ahead, AMZN expects to post revenue of somewhere between $28 billion and $30.5 billion for the current quarter, versus analyst estimates of $28.14 billion. That level of revenue would be an improvement of anywhere between 21% and 32% on Q2 2015’s revenue tally. That should roughly translate into operating income of somewhere between $375 million $925 million worth of operating income, versus $464 million worth of operational profits in the same quarter of last year.
That growth is just more of the same kind of growth AMZN has been producing for Amazon stock holders for a while now. There is a bit of a new twist in the recent and projected numbers, however. That twist is, we’re starting to see some respectable profitability.
It’s been a point of contention for years now … shareholders beginning to wonder if all that expensive revenue growth would ever pay off in terms of a solid bottom line. Morningstar analyst RJ Hottovy summed up the crux of the issue by simply saying, “They have to show they can balance growth and profitability, even with low profit numbers.”
The aforementioned numbers go a long way in suggesting that balance is indeed finally being found, making Amazon stock at least a little less stressful to own.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.