Amazon released its latest earnings report after closing bell tonight, posting adjusted earnings of $1.07 per share on $29.1 million in revenue. Analysts had been expecting earnings of 58 cents per share on $27.98 billion in sales. In last year’s first quarter, the online retailer posted losses of 12 cents per share on $12.72 billion in sales. Management had guided for between $26.5 billion and $29 billion in revenue for the first quarter.

Amazon.com, Inc. Soars After Smashing Earnings Estimates

Amazon earnings (profit)

Amazon’s net earnings were $1.07 per share or $513 million, compared with last year’s net losses of 12 cents per share or $57 million. Product sales climbed from $17.1 billion last year to $20.6 billion this year, while service sales increased from $5.6 billion to $8.5 billion. International sales increased from $7.7 billion to $9.6 billion, while Amazon Web Services sales jumped from $1.6 billion to $2.6 billion.

The first quarter marks the end of a year since the company started breaking out the financial details from Amazon Web Services, although the segment is now ten years old. Analysts had been looking for $2.54 billion in revenues from the cloud computing segment, which would have represented an increase of 62%.

Amazon devices doing well

Amazon management talked up the success of their devices tonight:

“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” Amazon Founder and CEO Jeff Bezos said in a statement. “Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts. “

The bar had been set quite high for Amazon, and Canaccord Genuity analysts had warned about this before tonight’s earnings report. They also noted that in the recent past, gross profit growth has been outpacing sales growth, and they expected the company’s gross margins to keep expanding. Among the tailwinds they’ve been watching are third-party sales, Amazon Web Services, and improvements in shipping efficiency, although they also warned that consensus estimates may be assuming that margins expand more quickly than they actually will.

For the second quarter, Amazon management expects $28 billion to $30.5 billion in sales, representing a 21% to 32% increase year over year. Consensus is $28.3 billion.

Shares of Amazon soared in after-hours trades, climbing by as much as 11.3% to $670.