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Amazon quarter better than expected; is it the Kindle effect?

Amazon gave a wide range for the second quarter, but first-quarter results were strong. CEO Jeff Bezos touted the Kindle.

Amazon's first-quarter sales and earnings were much better than expected as the company touted its Kindle ecosystem.

The company reported first-quarter earnings of $130 million, or 28 cents a share, on revenue of $13.18 billion, up 34 percent from a year ago. Earnings were down 35 percent from a year ago, but well ahead of estimates.

Wall Street was expecting Amazon to report first-quarter earnings of 7 cents a share on revenue of $12.9 billion. Going into the earnings report, analysts were worried about gross margins and slowing media sales.

Amazon acknowledged that it was hurt by currency rates.

The company touted its Kindle and Amazon Prime services. Amazon CEO Jeff Bezos said that the Kindle is the top e-reader and added that Prime subscribers get a free library of books. Kindle Fire remains the top seller on

As for the outlook, Amazon gave a wide range for the second quarter. The company projected revenue to be between $11.9 billion and $13.3 billion. Operating income will range from a loss of $260 million to a gain of $40 million. Wall Street is expecting second-quarter revenue of $12.82 billion.

Shares jumped 10 percent in after-hours trading.

By the numbers:

  • Amazon product sales were $11.25 billion. Services sales were $1.94 billion in the first quarter.
  • Technology and content expenses were $945 million, up from $579 million a year ago.
  • Fulfillment expenses were $1.29 billion, up from $855 million a year ago.
  • 56 percent of Amazon's first-quarter sales were in North America with international representing 44 percent.
  • Other revenue -- Amazon Web Services -- was $500 million in the first quarter, up from $311 million a year ago.

Here's the breakdown of revenue by product group.


This story originally appeared at ZDNet's Between the Lines under the headline "Amazon's Q1 stronger than expected; Is it the Kindle effect?"