By Sebastian Herrera 

Amazon.com Inc. reported record results for the first quarter of the year, as demand remained robust for the company's e-commerce services and revenue continued to grow in its cloud-computing and advertising businesses.

Seattle-based Amazon said first-quarter sales hit $108 billion, a 44% increase from the same period a year earlier, and profits more than tripled to $8.1 billion. Revenue far exceeded the $105 billion predicted on average by analysts polled by FactSet.

Amazon said it expects sales from April to June to reach between $110 billion and $116 billion, which would mark three consecutive quarters with more than $100 billion in revenue.

Amazon shares shot up about 5% in after-hour trading Thursday.

Amazon's success in the past year has catapulted the company to new heights, after consumers flocked to online shopping during pandemic lockdowns. The tech giant's dominant grip over e-commerce and continued expansion into new industries have strengthened its power, although the company continues to face challenges from regulators and some employees.

Amazon's first quarter is typically slower than its preceding end-of-year results, which are aided by holiday shopping sales. Yet the company has exceeded expectations in recent quarters. It shattered sales records last year as homebound Americans turned to its delivery services. The company's stock price rose 76% in 2020.

Amazon's dominance in online retail also parallels the strength of Amazon Web Services, the business line that rents server capacity and software tools to other corporations. AWS is Amazon's main profit center, though its recent growth has slowed as the cloud units of Microsoft Corp. and Google have moved aggressively to sign up new customers. AWS Chief Executive Officer Andy Jassy is set to take over as Amazon's CEO in the third quarter after Jeff Bezos said in February that he would depart the role to become executive chairman.

The company's advertising business has also become a major player in its industry. The fast-developing unit has put Amazon in competition with Google's and Facebook Inc.'s leading ad businesses.

The coronavirus pandemic helped Amazon, Facebook and Google grow even stronger, with the tech titans for the first time collecting the majority of all ad spending in the U.S. last year, The Wall Street Journal reported in March. Amazon also recently said it would begin streaming the National Football League's Thursday-night games by 2023, a deal that will expand Amazon's ad dollars and compete more directly with traditional television broadcasters.

"What we always get back to with Amazon is the optionality -- they have multiple businesses firing off," said John Blackledge, an analyst with investment firm Cowen Inc. Mr. Blackledge said with the pandemic's end in sight, investors are eager to see Amazon expand its one-day shipping offerings.

Amazon's earnings follow strong performances by its big tech peers this week. Google parent Alphabet Inc. set sales records for the first quarter, fueled by a surge in digital ad spending, while Microsoft posted a 19% increase in quarterly sales because of strong demand for its cloud and videogame services. Apple Inc.'s profit more than doubled to $23.6 billion because of surging sales of new, higher-price iPhones and pandemic-induced buying of products such as Mac computers and iPads.

The largest U.S. tech companies recorded staggering growth last year as consumers and businesses relied more on online shopping, software and cloud services, as well as their smart devices and video streaming. The combined revenue for Amazon, Google, Facebook, Apple and Microsoft grew by one-fifth to $1.1 trillion. Their collective market capitalization soared to almost $8 trillion at the end of 2020, compared with about $5 trillion at the end of 2019.

Amazon's achievements have come as regulators increasingly scrutinize the company's market power. Congress has considered changes to antitrust laws that could make it easier for the government to challenge certain business strategies and practices or force tech giants to separate certain units. Last year, a congressional panel found Amazon had amassed "monopoly power" over sellers on its site, bullied retail partners and improperly used seller data to compete with rivals.

Amazon has said that it is wrong to presume its success can only result from anticompetitive behavior and that it is focused on keeping prices lower for consumers.

The company has also faced activism from employees. It said Wednesday that it is raising wages for its hourly workers, providing more than 500,000 of its employees with pay increases of between 50 cents and $3 an hour. Amazon announced the wage increases after workers at one of its warehouses voted not to unionize earlier this month in Alabama. More than 70% of those who participated in the election rejected unionization, ensuring for now that Amazon retains full control over how it manages and pays employees as well as its expectations of warehouse workers.

Despite the company's victory at the Alabama facility, Mr. Bezos said the company aims to improve how it handles its workforce. In his last annual letter to shareholders as CEO, released this month, Mr. Bezos said Amazon is working to invent solutions to reduce the number of injuries at warehouses. He defended the company against accusations by critics that it treats its workers unfairly.

Write to Sebastian Herrera at Sebastian.Herrera@wsj.com

 

(END) Dow Jones Newswires

April 29, 2021 16:31 ET (20:31 GMT)

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