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Amazon strong quarter beats analysts’ expectations

Amazon reports profits for the first quarter of $513m, compared with a net loss $57m in the same period the year before

Amazon has reported a strong first quarter, driven mainly by sales of its Kindle e-reader and Fire Tablet computers, beating analysts’ expectations and sending up its share price.

Net sales increased 28% compared with the same period the year before to $29.1bn, resulting in profits for the quarter of $513m, compared with a net loss $57m in the first quarter of 2015 and ahead of the average analysts’ revenue forecast of $27.98bn, according to Thomson Reuters

Operating income was $1.1bn in the first quarter, compared with $255m in first quarter 2015.

“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” said Jeff Bezos, founder and CEO of Amazon.com.

“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,” he said.

Amazon Echo, a wireless speaker and voice command device, is also off to a good start, said Bezos. “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.”

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The Amazon results came in sharp contrast to Apple’s results, which revealed a fall in revenue from devices for the first time in 13 years.

While Apple shares slumped 8% in response to its quarterly results, investors were encouraged by Amazon’s results, sending shares up 13% to $679 in after-hours trading, according to Fox news.

Amazon reported strong growth in customers for its Prime service, which competes with video streaming services like Netflix, while the company’s cloud storage and software services division saw strong sales growth, with revenue up 64% compared with the same period the year before to $2.56bn.

Buoyed by a strong first quarter, Amazon predicts second quarter net sales of between $28bn and $30.5bn, or to growth of between 21% and 32% compared with second quarter of 2015, and predicts operating income of between $375m and $975m, compared with $464m in second quarter of 2015.

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