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Amazon Grows Q1 Sales 42 Percent Excluding AWS

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UPDATE 5:30 pm: Amazon raises cost of Prime membership in US from $99 to $119.

Amazon.com Inc. grew net sales 43% to $51 billion in the first quarter of 2018 compared with $35.7 billion in first quarter 2017. The numbers reflect all units including its AWS web-hosting business.

It showed a profit (net income) of $1.6 billion compared with $724 million for the same period last year.

Amazon’s North American net sales rose 46% year over year and comprised 60% of total sales. International net sales rose 34%, comprising 29% of total sales. Its smaller AWS unit (11% of total sales) saw net sales growth of 49%.

Press release follows:

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Amazon.com, Inc. today announced financial results for its first quarter ended March 31, 2018.

Operating cash flow increased 4% to $18.2 billion for the trailing twelve months, compared with $17.5 billion for the trailing twelve months ended March 31, 2017. Free cash flow decreased to $7.3 billion for the trailing twelve months, compared with $10.1 billion for the trailing twelve months ended March 31, 2017. Free cash flow less lease principal repayments decreased to $1.1 billion for the trailing twelve months, compared with $6.1 billion for the trailing twelve months ended March 31, 2017. Free cash flow less finance lease principal repayments and assets acquired under capital leases decreased to an outflow of $3.0 billion for the trailing twelve months, compared with an inflow of $3.3 billion for the trailing twelve months ended March 31, 2017.

Common shares outstanding plus shares underlying stock-based awards totaled 504 million on March 31, 2018, compared with 497 million one year ago.

Net sales increased 43% to $51.0 billion in the first quarter, compared with $35.7 billion in first quarter 2017. Excluding the $1.6 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 39% compared with first quarter 2017.

Operating income increased 92% to $1.9 billion in the first quarter, compared with operating income of $1.0 billion in first quarter 2017.

Net income was $1.6 billion in the first quarter, or $3.27 per diluted share, compared with net income of $724 million, or $1.48 per diluted share, in first quarter 2017.

“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” said Jeff Bezos, Amazon founder and CEO. “As a result, the AWS services are by far the most evolved and most functionality-rich. AWS lets developers do more and be nimbler, and it continues to get even better every day. That’s why you’re seeing this remarkable acceleration in AWS growth, now for two quarters in a row. A huge thank you to all our AWS customers, and you can be sure we’ll keep working hard for you.”

Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of April 26, 2018, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.

Second Quarter 2018 Guidance
Net sales are expected to be between $51.0 billion and $54.0 billion, or to grow between 34% and 42% compared with second quarter 2017. This guidance anticipates a favorable impact of approximately $1.2 billion or 320 basis points from foreign exchange rates.
Operating income is expected to be between $1.1 billion and $1.9 billion, compared with $628 million in second quarter 2017.

This guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.

Note: See full press release (link below) for the quarter’s highlights, charts, and more information.

SOURCE: Amazon Press Release

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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