Amazon beats Q1 revenue estimates

Amazon.com, the world’s largest internet retailer, beat analysts’ first-quarter revenue estimates, led by demand for Kindle devices and a jump in sales for outside vendors through its website.

Net income fell to $130m, or 28 cents a share, from $201m, or 44 cents, a year earlier, the Seattle-based company said in a statement. Sales rose 34% to $13.2bn, compared with the average analyst estimate of $12.9bn, according to data compiled by Bloomberg.

Chief executive Jeff Bezos is looking to add customers by pouring money into new versions of the Kindle and warehouses that are equipped to send out products faster.

The Kindle Fire tablet is the best-selling item on Amazon’s site, the company said. In the fourth quarter, the company shipped 4.7m Kindle Fires, giving it 16.8% of the market and making it No 2 behind Apple’s iPad, according to IDC.

“Underlying user growth trends remain strong,” Douglas Anmuth, an analyst at JPMorgan Chase & Co. (JPM) in New York, wrote in a research note this week. “We project margin to improve in the back half of the year.”

Amazon shares surged to $215 following the report. They had climbed less than 1% to $195.99 at the close in New York, and have gained 13% so far this year. Amazon trades at about 141 times trailing 12-month earnings, compared with an average of about 53 for similar companies, data compiled by Bloomberg show.

Second-quarter operating income will range from a loss of $260m to a gain of $40m, the company said.

Analysts in a Bloomberg survey were projecting operating income of $184m. Sales in the current period will be $11.9bn to $13.3bn, Amazon said, compared with an estimate of $12.8bn.Bezos spent about $4.6bn on Amazon’s warehouses last year

— Bloomberg