Amazon Shares Rally 15% After Earnings Blow Past Estimates

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Amazon shares surged nearly 15 percent at market open Friday, in the first session since the online retail giant reported better-than-expected quarterly results.

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Amazon said after Thursday's closing bell that first-quarter profits dropped 35 percent to $130 million, or 28 cents a share from a year earlier, as operating expenses outstripped revenue growth.

But investors cheered the revenue figure which jumped 34 percent to $13.2 billion from a year earlier. Analysts were looking for earnings of six cents a share on revenue of $12.9 billion, according to estimates from FactSet Research.

Amazon has been shelling out hundreds of millions of dollars to build new warehouses, develop new technology and expand its digital library of books. The company is embarking on the spending-spree in an effort to move beyond its traditional roots as an internet bookseller.

Even as Amazon spent furiously, however, it improved its profit margin by some measures, according to The Wall Street Journal.

While Amazon's operating margin in the first quarter was 1.5 percent, down from 3.3 percent a year ago, analysts focused on the company's gross profit margin growth, which widened to 24 percent from 22.8 percent a year earlier, the WSJ said.

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The company's stock surged 14.5 percent after the first few minutes of trade to $224.24 a share.

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