Amazon profit crushes estimates as cloud service revenue jumps

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Shares of the world's biggest online retailer jumped nearly 13 percent to $679 in extended trading on Thursday.

Amazon has seen strong growth in subscribers to its Prime loyalty program, which offers one-hour delivery, original TV programming and access to its digital entertainment products such as Prime Music and Prime Video for an annual fee of $99.

The company recently launched a monthly subscription to the program for $10.99. Amazon has also said it plans to offer its video streaming service for a monthly fee of $8.99.

Amazon's net sales in North America, its biggest market by revenue, increased 26.8 percent to $17 billion in the first quarter.

Revenue from its cloud services business, Amazon Web Services, surged 63.9 percent to $2.57 billion. The unit, Amazon's fastest growing business, is seen as the next driver of growth for the company.

Amazon reported net income of $513 million, or $1.07 per share, for the quarter ended March 31.

The company had a loss of $57 million, or 12 cents per share, a year earlier.

Net sales surged 28.2 percent to $29.13 billion.

Analysts on average had expected a profit of 58 cents per share and revenue of $27.98 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Narottam Medhora in Bengaluru; Editing by Kirti Pandey)