Amazon revenue beats, cloud computing more profitable than expected
By Nandita Bose and Lehar Maan
(Reuters) - Amazon.com Inc's first-quarter revenue grew more than expected as rising sales in North America and its burgeoning cloud-computing services unit offset new business investments, boosting its shares nearly 7 percent.
The e-commerce company for the first time broke out financial details of its secretive cloud computing unit, Amazon Web Services, on Thursday, saying revenue jumped almost 50 percent to $1.57 billion, or about 7 percent of total revenue.
The unit's operating income grew 8 percent to $265 million.
Amazon shares rose $26.01 to $416 in extended trading, after closing slightly higher at $389.99 on Nasdaq.
Chief Executive Jeff Bezos revealed in a statement that Amazon Web Services is a $5 billion business and its growth is accelerating.
"We're putting a lot of capex (capital expenditure) there, and we think over time we will be able to generate significant free cash flow," Chief Financial Officer Tom Szkutak said on a conference call.
Cloud computing has turned out to be more lucrative than expected, Wedbush Securities analyst Michael Pachter noted. "Amazon's Web service is profitable, and apparently was a year ago as well. Everybody thought it was losing money ... and is probably a bit smaller than people thought it was."
Amazon's sales from North America rose 24 percent to $13.4 billion in the quarter ended March 31, the company said. Continued...