Amazon blew the doors off Wall Street expectations for earnings in the first quarter, helped by comparisons with a year-ago period hit by Covid-19 but also by Prime Video and other standout units.
Video streaming — sometimes a throwaway in the company’s earnings announcements — was this time a centerpiece. Founder and CEO Jeff Bezos, who is shifting to executive chairman this summer, noted that streaming has risen 70% compared with the same time a year ago. Prime Video, which has recently marked its 10th anniversary, served film or TV titles to some 175 million global members.
Earnings came in at $15.79 per diluted share for the quarter ending March 31, compared with $5.01 a year ago. Revenue surged 44% to $108.5 billion.
The company also said it expects revenue of $110 billion to $116 billion in the quarter ending June 30, which is above the current forecast of $108.4 billion from Wall Street analysts. Prime Day, an annual promotion, is scheduled for the second quarter and is apt to provide a big e-commerce lift.
Bezos also gave a major shout-out to Amazon Web Services. “In just 15 years,” he said, “AWS has become a $54 billion annual sales run rate business competing against the world’s largest technology companies. “We love Prime Video and AWS, and we’re proud to have them in the family.”
While the updated and prominent stats for Prime Video were unusual, full visibility into the company’s streaming business remains limited. The company’s programming is rated by Nielsen in the U.S., but unlike Netflix it releases only directional reports on viewing. Last fall, for example, it raved that Borat Subsequent Moviefilm was watched by “tens of millions” of members in its first weekend — not exactly a number that got agents’ calculators humming.
Even in offering the 70% stat, for example, the company did not provide a number for total viewing or any other streaming metrics. Arriving at an apples-to-apples gauge of Prime Video is also a challenge, given how many Prime members are only aboard for free shipping and other discounts. The loyalty program is widely regarded as the most successful of all time, in part because of the relentless focus on member benefits, regardless of whether subscribers sign up for Marvelous Mrs. Maisel or cheap toiletries.
Bezos singled out upcoming originals The Tomorrow War, The Underground Railroad and Tom Clancy’s Without Remorse. The lead entertainment bullet point in the earnings release also described the 2020-21 awards season as its “most successful” to date, capped by 12 Oscar nominations for four films. The company took home two statuettes, for Best Film Editing and Best Sound for Sound of Metal.
While Amazon commands vast resources and market value approaching $2 trillion, it had its knees buckled by the onset of the coronavirus in the first quarter of 2020. Once it untangled knots in its suddenly taxed supply chain and tackled Covid testing and safety, it became one of the biggest beneficiaries of the pandemic.
North America paced the quarter, with sales climbing to $64.4 billion from $46.1 billion in the year-ago period.
Investors sparked to the results, sending Amazon shares up 4% in after-hours trading to record territory. They have powered up more than 50% over the past year, part of a wave of tech advances as a wide range of businesses and consumers relied on digital tools more than ever before.
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