Amazon beats Street estimates in Q1

“Go” store remains in beta, but company touts “potential”

Amazon late Thursday said that financial results in its fiscal first quarter exceeded analyst expectations on the strength of growing revenue from its Prime members as well as advertising and cloud-based business services.

Worldwide sales of $35.7 billion increased by 23%; including growth in North America, where sales increased by 24% to $21.5 billion. Those totals were slightly above analyst estimates, while earnings-per-share of $1.48 blew past consensus estimates of $1.12. Net income in the quarter, which ended March 31, grew by 41% to $724 million.

In a conference call discussing results, officials provided little updates on the company’s growing food and store-based retail initiatives.

In response to an analyst question, CFO Brian T. Olsavsky said the company was excited over the potential for its Amazon Go project, a convenience store utilizing technology to allow for a checkout-free shop. That store opened to Amazon employees in Seattle late last year but remains in a beta test, although officials had hoped it would open to the public by now.

“Amazon Go is in beta in Seattle, and while that's not large and only one site, we're excited about the potential there and the use of the technologies of computer vision, sensor fusion and deep learning,” Olsavsky said. “We think that has a lot of potential.”

Officials also said its Amazon Fresh service, which provides grocery and fresh-food delivery, is now operating in 21 U.S. cities and in London and Tokyo.

Amazon Prime, the loyalty program providing a customer base from which the company intends to draw nearly all of its food shoppers, helped to raise revenue from subscriptions by 49% in the quarter to $1.9 billion. Subscription revenue also includes services like books, e-books, and streaming video and music. Olsavsky declined to quantify Prime membership growth, “other than to say it's been very strong and Q4 strength has continued into Q1.”

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