Amazon (AMZN) 1Q16 Earnings: Beats Estimates on Top and Bottom Lines; 2Q Guidance in Line

Executive Summary

• Amazon reported 1Q16 revenues of $29.1 billion, up 28.2% year over year and ahead of the $28.0 billion consensus estimate. EPS was $1.07, beating the $0.60 consensus estimate and compared to a loss of $0.12 in the year-ago quarter.
• The fastest growth was in Amazon Web Services (AWS), whose revenues grew by 64% year over year, to nearly $2.6 billion. Revenues from sales of electronics and other general merchandise grew by a more modest 31%, yet the segment’s revenues were up by more than $4.9 billion year over year.
• For 2Q16, Amazon expects revenues of $28.0–$30.5 billion, representing 21%–32% year-over-year growth. The company expects operating income of $375–$975 million, compared to $464 million in the year-ago quarter.