Amazon's operating expenses rose 22 per cent to $US15.9 billion, from $US13 billion in the first three months of the year. Photo: Bloomberg
Amazon.com reported solid first-quarter profits as the world's largest internet retailer controlled shipping expenses and other costs, but international revenue growth slowed.
Amazon, which has been on a spending spree in recent years, posted declines in net income and operating profit, year over year.
However, the company's gross profit margin, a closely watched measure of its profitability, came in at 26.6 per cent, the highest in at least a decade, according to Scott Tilghman, an analyst at B Riley & Co.
"It's a very solid performance with a strong expansion of gross margins," Tilghman said.
Amazon has been building distribution warehouses closer to customers, reducing shipping costs. It also been charging third-party merchants on its marketplace higher fees for shipping services. In the first quarter, net shipping costs were 4.7 per cent of sales, down from 5.1 per cent a year earlier.
First-quarter revenue jumped 22 per cent to $US16.07 billion, propelled by growing sales of digital content, cloud-computing services and gains in its main retail business.
International revenue rose 16 per cent in the quarter, year-over-year. In the same period of 2012, Amazon's international revenue climbed 31 per cent, year-over year.
"International concerns are weighing on the company still. It's probably Europe mainly, given that the UK and Germany are the main markets for Amazon overseas," Tilghman said.
Amazon shares rose 1.6 per cent to $US279 in after-hours trading following the results.
Amazon forecast second-quarter revenue of $US14.5 billion to $US16.2 billion and operating results from break-even to $US350 million. The latter guidance excludes stock-based compensation expenses and other items such as amortisation of intangible assets.
Wall Street was looking for second-quarter revenue of $US15.94 billion and operating results of $US452 million, according to Mark Mahaney, an analyst at RBC Capital Markets.
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