Amazon Stock Jumps As First-Quarter Earnings Slaughter Views

New annual Amazon Prime subscribers will pay $119 a year for the membership program, a $20 increase from $99, beginning May 11. Amazon Prime which is an annual membership service’s price is increasing from $99 to $119. The new price will apply to existing members’ renewals starting June 16.

Amazon said it earned $1.6 billion in the first three months of this year on revenue that soared to $51 billion from $36 billion in the same time last year. Earlier this year the Prime monthly rate was increased to $12 a month from $10.99 a month. That’s partly what the company’s first-quarter results seem to argue.

Shares of Amazon spiked as much as 7 percent to a record $1,619 in after-hours trading, erasing recent losses following a series of tweets from President Donald Trump that attacked the company. The world’s largest online retailer said net income rose to $1.6 billion, or $3.27 per share in the quarter ended 31 March.

Amazon’s shares have also outperformed the S&P 500, rising 30 per cent this year as of Thursday’s market close, compared with the S&P’s less than 1 per cent decline. Wall Street had forecast $5.25 billion.

The Seattle company reported net income was $660.1 million (47 cents per share) during the quarter.

The news of the Prime price jump flies in the face of an alleged quote from Jeff Bezos in which he reportedly promises that Amazon would work to always “charge less” instead of more.

“There are many features we’ve added to Prime”, he said.

Overall revenues for the firm sat at $51.04bn, comfortably above the $49.78bn that Wall Street had forecast, and a 43 per cent increase from the same time previous year. The company’s core operating expenses – excluding its cost of sales covering items like payments for products that Amazon sells online – is consistently growing faster than Amazon’s rapidly growing revenue.

Facebook co-founder Mark Zuckerberg, whose fortune dropped $US2.5 billion on Tuesday, got a reprieve Thursday as his wealth increased by $US5.8 billion, a day after the social network posted better-than-expected results for the first quarter. This was once an insignificant business, but in the first-quarter it rose 139 percent year-over-year, to $2.03 billion in revenue.

The company’s cloud services unit is hitting its stride, executives said on a conference call Thursday evening, and Moody’s Technology Analyst Stephen Sohn noted the effect on margins.