Amazon smashes expectations as cloud business and Prime shine

Online retail giant Amazon last night banished the gloom growing over the tech sector with first quarter sales and profits that smashed expectations.

Shares in the company rose almost 13% in after-hours trading after it revealed its Amazon Web Services (AWS), its cloud computing division, helped sales leap nearly 30% to $29.1 billion (£19.8 billion) in the three months to March 31 - its strongest growth since 2012. Profits were $513 million compared to the year-earlier's loss of $57 million.

The figures come after a string of disappointing results for the likes of Apple, Microsoft and Intel had raised concerns about a slowdown in the tech and internet sector. Amazon had also missed forecasts in its previous quarter, leaving some shareholders worried about its comparatively thin profit margins.

But the Jeff Bezos-founded firm appeared back on song and offered upbeat guidance for its current quarter. Margins fell to 27.9% but improved on last year's 16.9% and it forecast sales of between $28 billion to $30.5 billion, compared to the $28.33 billion analysts had pencilled in.

As well as strength at AWS, where revenues rose 64%, Amazon said it had seen more uptake of Prime, its membership scheme offering dast delivery and a video streaming service.