Amazon Earnings Top Forecasts as Revenue Jumps

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Amazon CEO Jeff Bezos

Amazon reported first-quarter earnings that beat market expectations. Revenue jumped 22 percent, helped by growing sales of digital content, cloud-computing services and gains in its main retail business.

After the earnings announcement, the company's shares traded higher before sharply falling in extended-hours trading. (Click here to get the latest quote.)

Net income for the quarter decreased 37 percent to $82 million, or 18 cents per diluted share, from $130 million, or 28 cents a share, in the year-earlier period.

The company's profit has shrunk in recent years as it invests for longer-term growth, building distribution warehouses across the country, developing a Kindle Fire tablet and a digital content business in competition with Apple, and bursting into TV production.

"Amazon Studios is working on a new way to greenlight TV shows. The pilots are out in the open where everyone can have a say," said Jeff Bezos, founder and CEO of Amazon.com, in a statement. "Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members."

However, gross profit margin, a closely watched measure of its profitability, came in at 26.6 percent, the highest in at least a decade, according to Scott Tilghman, an analyst at B Riley & Co.

"It's a very solid performance with a strong expansion of gross margins," Tilghman said.

Revenue increased 22 percent to $16.07 million from $13.19 billion a year ago.

Analysts had expected the online retailers to report earnings excluding items of 8 cents a share on $16.15 billion in revenue, according to a consensus estimate from Thomson Reuters.

For the second quarter, Amazon expects its results to be between a loss of $340 million and a gain of $10 million. It expects revenue to be between $14.5 billion to $16.2 billion vs. estimates of $15.9 billion.

"International concerns are weighing on the company still. It's probably Europe mainly, given that the U.K. and Germany are the main markets for Amazon overseas," Tilghman said.

—Reuters contributed to this report.