Amazon’s profit increases 18 percent

NEW YORK — Amazon first quarter profit rose 18 percent as shoppers continued to flock to the online mega retailer to buy goods.

Results beat expectations and shares rose nearly 2 percent in aftermarket trading.

Amazon has long focused on spending the money it makes to grow its business and expand into new areas, from movie streaming to e-readers and even grocery delivery. On Wednesday, it launched Prime Pantry, a grocery delivery service for Prime members And earlier this month, it introduced its first set-top video streaming box called Amazon Fire that sells for $99. Rumors of an Amazon phone have been swirling as well, but nothing has materialized.

“We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start,” said CEO Jeff Bezos.

While investors have largely given Amazon a pass for focusing on growth and investing rather than turning a strong profit, Amazon has been making some moves lately to strengthen its bottom line. It boosted its Prime 2-day shipping membership program annual fee from $79 to $99 in March to offset higher shipping costs.

Shipping costs rose 31 percent to $1.83 billion during the quarter.

And to entice more people to sign up for the service at the $99 price, which includes its streaming video service, on Tuesday the retailer said it inked a deal with HBO to stream some of its older shows online beginning May 21. The news was a coup for Amazon. HBO has steadfastly refused to license any of its programming to other streaming services such as Netflix or Hulu. In a media call, executives did not give specifics but said renewals were exceeding expectations.

Net income for the quarter rose to $108 million, or 23 cents per share. That compares with net income of $82 million, or 18 cents per share last year. Analysts expected 21 cents per share, according to FactSet.

Revenue rose 23 percent to $19.74 billion from $16.07 billion. Analysts expected $19.42 billion.

In fiscal 2014, the company expects revenue of $18.1 billion to $19.8 billion. Analysts expect $19.01 billion.

In aftermarket trading, shares rose $6.35, or 1.9 percent, to $343.50, after closing the day up nearly 4 percent at $337.15. The stock reached an all-time high of $408.06 on Jan. 22. Since then, it has dropped 17 percent.

More in Herald Business Journal

Voters are on the sidelines as the port fills a vacant seat

Troy McClelland resigned from the Port of Everett commission too late for an election before 2019.

Don’t rely just on productivity measurements to value a worker

The controversies swirling around the productivity data at the national level are… Continue reading

In space capsules today, little room but big improvement

Boeing and SpaceX are relying on a tried-and-true design as they each develop new spacecraft.

First Boeing KC-46 delivery to Air Force slides into 2018

Certification milestones have been missed, and problems have emerged in flight test, a source says.

SEC reveals hack, possibility info was used for trading

The regulatory agency said the hack was discovered last year.

Newest must-try eatery: 85°C Bakery Cafe in Lynnwood

The popular bakery, part of a Taiwan-based chain, is already drawing out-the-door crowds.

Snohomish County tax liens

Tax liens are gathered from online public records filed with the Snohomish… Continue reading

Trudeau: Canada could stop dealing with Boeing over dispute

Boeing had petitioned the U.S. to investigate government subsidies of Bombardier’s CSeries aircraft.

Toys ‘R’ Us files for bankruptcy but keeps stores open

Retailers of all kinds are struggling. Toys ‘R’ Us is among at least 18 other bankruptcies this year.

Most Read