Amazon revenue beats estimates as cloud sales surge

Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City, January 29, 2016.

Reuters/Mike Segar/File Photo

Amazon.com Inc (AMZN.O) reported a better-than-expected rise in quarterly revenue, powered by blockbuster growth in its cloud services unit and an increase in subscriptions for its Prime loyalty program.

The world’s biggest online retailer’s shares were up 2 percent in after-hours trading on Thursday.

Amazon forecast current-quarter net sales of between $31.0 billion and $33.5 billion, factoring in sales from its Prime Day annual shopping festival.

The company’s net sales in North America, its biggest market, jumped 28.1 percent to $17.67 billion.

Revenue from its cloud services business, Amazon Web Services, surged 58.2 percent to $2.89 billion. This beat the average estimate of $2.83 billion, according to market research firm FactSet StreetAccount.

The unit, Amazon’s fastest growing business, is seen as the next driver of growth for the company.

The company’s net sales rose 31.1 percent to $30.40 billion in the second quarter ended June 30.

Net income rose to $857 million, or $1.78 per share, from $92 million, or 19 cents per share, a year earlier.

Analysts on average had expected a profit of $1.11 per share and revenue of $29.55 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Saumyadeb Chakrabarty)