By Sebastian Herrera
Amazon.com Inc. reported record quarterly profit as demand
remained robust for its deliveries, cloud-computing and advertising
businesses, capping a blockbuster earnings season for the world's
largest technology companies.
Seattle-based Amazon said profits more than tripled to $8.1
billion, a quarterly record for the e-commerce company, and
January-to-March sales were $108 billion, a 44% increase from the
same period a year earlier. Revenue far exceeded the $105 billion
predicted on average by analysts polled by FactSet.
Amazon, Apple Inc., Facebook Inc., Google and Microsoft Corp.
all reported significant gains in profits and revenue, underscoring
how the pandemic has helped strengthen technology companies and put
them increasingly at the center of daily life around the world.
Apple's profit more than doubled to $23.6 billion due to higher
sales of new, higher-priced iPhones as well as Mac computers and
iPads. A surge in digital-ad spending lifted Facebook and Google
parent Alphabet Inc., while Microsoft posted a 19% increase in
quarterly sales as more customers turned to its cloud and videogame
services while staying home during lockdowns.
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 rose about 3.5% in after-hour trading
The tech giant's success in the past year has catapulted the
company to new heights, after consumers flocked to online shopping
during pandemic lockdowns. Amazon'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
The company said Thursday that it expects its annual Prime Day
shopping extravaganza to occur in its second quarter. The event,
which is typically held in the third quarter, is a windfall for
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 and Google have moved aggressively to sign
up new customers. Sales for the cloud unit totalled $13.5 billion
in the first quarter, a 32% increase from the same period a year
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.
Amazon's advertising business has also become a major player in
its industry. The fast-developing unit has put the e-commerce giant
in competition with Google's and Facebook Inc.'s leading ad
businesses. Amazon's category that includes ad sales rose 77% in
the first quarter from a year ago to $6.9 billion.
The coronavirus pandemic has 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
"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.
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
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 16:56 ET (20:56 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.