Amazon demolished Wall Street's profit expectations for its first quarter, thanks to a boom in online sales and huge demand for its cloud services.
NPR's Yuki Noguchi reports for our Newscast unit that the retail giant's profits more than doubled from a year ago.
"Amazon's profits roughly tripled what analysts had been expecting. Demand for its retail business soared, and its myriad investments in other areas, from cloud computing to streaming media services and its Alexa smart speaker system also paid off.
The company's sales reached $51 billion, which is a 43 percent increase over last year. Its net income was $1.6 billion.
Amazon is working on a long list of projects, from its acquisition of Whole Foods to Web security and software. Its statement did not address recent attacks from President Trump, who accused Amazon of abusing sales tax rules and the postal system."
Profits were up despite Amazon's heavy spending, according to The Wall Street Journal reports:
"Amazon has been spending heavily on building more warehouses and devices, as well as bulking up on assets for its delivery network and video content. During the quarter, it started adding one- and two-hour delivery from its newly acquired Whole Foods Market grocery stores in a handful of markets, as well as gearing up for the launches this week of Echo devices for children and the ability to deliver to customers' cars.
Those moves highlight Amazon's rapid ascent from its roots as an online bookseller to a conglomerate that offers a competitive line of tablets and voice-activated devices, runs a dominant cloud-services business and sells groceries from the neighborhood store. As it expands into new business areas globally and furthers its reach into consumers' lives — from its Hollywood studios to its recent experimentation into health care and financial services — it is drawing attention to its growing clout."
Amazon's share price surged 7 percent in after-hours trading following the release of the quarterly news. Amazon's stock has outperformed the S&P 500 — rising 30 percent this year as of Thursday's market close.
CEO Jeff Bezos owns 16 percent of Amazon and is the richest man in the world, according to Forbes magazine. He is the first person to top $100 billion as No. 1 on the Forbes list of the Word's Billionaires.
Amazon also announced on Thursday that its annual Prime membership fee is going up to $119 a year from $99. Company executives said that the 20 percent hike is due to higher costs to maintain the program, such as shipping fees.
New Prime members in the U.S. will be charged the higher fee starting May 11. The increase will apply to renewal memberships starting on June 16. The last time Amazon raised the annual fee was four years ago. Earlier this year, it increased the monthly rate to $12.99 a month from $10.99.
Besides free two-day shipping, Prime members get other perks, such as access to Amazon 's video and music streaming services.
Amazon currently commands roughly 43 cents of every dollar spent online, according to estimates by research firm eMarketer.