Amazon sees healthier-than-expected earnings

The e-retail giant has said it is 'pleased' with growth of its Kindle Fire e-reader and underlines plans to invest in infrastructure, as revenue rises 34 percent and earnings beat analysts' targets
Written by Larry Dignan, Contributor

Amazon has seen first-quarter sales and earnings that were much better than expected, bolstered by Kindle e-reader sales.

The online retail giant reported first-quarter earnings of $130m (£80m), or 28 cents a share, on revenue of $13.18bn, up 34 percent from a year ago. Earnings were down 35 percent from a year ago, but well ahead of Wall Street analysts' estimates of 7 cents a share.

"In terms of the Kindle Fire, we are pleased with the growth that we are seeing," Amazon's chief financial officer Tom Szkutak said during an earnings conference call. "Customers are buying a lot of content, and you are seeing that when you look at particularly in North America.... We are going to continue to add more and more content for customers across all of our digital categories."

Fifty-six percent of Amazon's first-quarter sales were in North America, with international representing 44 percent. As for its Amazon Web Services (AWS) cloud business, Szkutak said the company will continue to invest heavily in infrastructure.

"Our [first-quarter] capital expenditures were $386m. The increase in capital expenditures reflects additional investments in support of continued business growth consisting of investments in technology infrastructure, including the Amazon Web services and additional capacity to support our fulfillment operations," he said.

For more on this ZDNet UK-selected story, see Amazon's Q1 stronger than expected; Is it the Kindle effect? on ZDNet.com.

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