As the pandemic continued to raise Amazon’s online shopping, cloud, and advertisement companies, profits more than tripled in the first quarter of 2021.
The tech giant posted a record $8.1 billion in quarterly net income on Thursday, up 224 percent from the same time last year and well above Wall Street analysts’ expectations of $4.98 billion. Earnings per diluted share were $15.79.
Total net revenues for the quarter increased by 44% year over year to $108.5 billion, exceeding analyst expectations of $104.5 billion.
In after-hours trading, Amazon (AMZN) shares jumped as much as 4%.
“Amazon has the almost perfect business for the world right now,” James Harris, global chief strategy officer at Mindshare Worldwide, said in an email following the report. “The world’s leading e-commerce platform, a growing cloud business and a smaller but growing advertising capability all working in unison. It’s a compelling offer.”
Amazon Web Services, the company’s cloud arm and biggest moneymaker, recorded net revenue of $13.5 billion in the third quarter, up 32 percent year over year. As more businesses embrace the technology to better handle hybrid workforces, growth has accelerated from the previous quarter.
Among the quarter’s other highlights, Amazon currently has more than 200 million paying Prime subscribers, and Prime Video streaming hours have increased by more than 70% year over year.
Despite a difficult year-over-year comparison due to the increase in demand triggered by the pandemic in 2020, Amazon expects net sales of $110 to $116 billion in the second quarter of 2021, up 24 percent to 30% from the same timeframe the previous year. That’s assuming the annual Prime Day case falls in the middle of the quarter, as it usually does.
Amazon revealed on Wednesday, the day before the earnings report, that it will invest $1 billion to lift salaries for over 500,000 hourly employees by up to $3 an hour as it continues its hiring spree that has brought its global workforce to over 1.3 million people. However, the company will not raise its $15-per-hour minimum wage.
Earlier in the first quarter, Amazon was the target of a historic union campaign at an Alabama plant, which brought extreme attention to the company’s labor practices. Despite celebrity endorsements and even US President Joe Biden’s encouragement, the union vote failed.
The company’s leadership will be shaken up in the second half of this year, as Amazon founder Jeff Bezos steps down as CEO, to be replaced by current Amazon Web Services CEO Andy Jassy, and the cloud unit will get a new leader.