Amazon (NASDAQ: AMZN) started 2019 off strong with net sales of $59.7 billion in the first quarter, a 17% year-over-year increase, compared to $51.0 billion in the first quarter of 2018. Operating cash flow increased 89% to $34.4 billion for the trailing 12 months, and operating income was $4.4 billion, compared to $1.9 billion in Q1 2018. Net income was more than double the prior year quarter at $3.6 billion, or $7.09 per diluted share, compared to $1.6 billion, or $3.27 per diluted share in Q1 2018.

Operational highlights from the April 25 earnings release include:

• As of March 31, 2019, there were 507 million shares outstanding, compared to about 504 million last year.
• Fire TV now has more than 30 million active users.
• Amazon now offers Apple Music via Alexa on Fire TV, Echo and Sonos devices in the U.S. and the U.K. The Apple TV app will also be available on Fire TV devices.
• Amazon and Google are partnering to launch the official YouTube app on Amazon Fire TV devices and Fire TV Edition smart TVs and a Prime Video app on Chromecast and Chromecast built-in devices.
• MLB.tv is now available as a subscription through Prime Video Channels.
• The original series Hanna debuted on Prime Video.
• Amazon and Whole Foods Market announced price cuts on fresh produce and expanded Prime benefits with more exclusive weekly deals.
• Amazon launched Amazon Day that allows Prime members to choose the weekday their packages will arrive, helping customers group their purchases and Amazon to consolidate and save on shipping costs. Prime members can still select different shipping options per purchase.
• Amazon has launched Key by Amazon in 50 U.S. cities and surrounding areas. This allows Prime members to have secure delivery of their packages to their garage, home or car.
• Select items are now eligible for Flexible Spending Account or Health Savings Account debit cards.
• Amazon announced Shipment Zero, the companys commitment to make all customer shipments net zero carbon with 50% of them to be net zero by 2030.
• Amazon announced three new renewal energy projects – Ireland, Sweden and the U.S.
• One Hundred students received the first $40,000 Amazon Future Engineer scholarships to study computer science.
• Amazon is funding computer science classes in 1,000 high schools.
• AWC has added new customers and partnerships including Gogo, Inc., Lyft, Second Spectrum, L.A. Clippers and Volkswagen.

A big announcement made on the earnings call was a change in the Prime free two-day shipping program. Currently, Prime members can get free two-day shipping on eligible items. Amazon is upping its game, reducing the shipping time to free one-day shipping.

Were able to do this, because we spent 20 plus years expanding our fulfillment and logistics network, but this is still a big investment a lot of work to do ahead of us, said Brian Olsavsky, senior vice president and CFO, on the earnings call, transcribed by Seeking Alpha. Weve already started down this path. Weve in the past months significantly expanded our one-day eligible section and also expanded the number of zip codes eligible for one-day shipping.

The investment he is referring to is approximately $800 million of spending related to this evolution. This change will help Amazon compete with other retailers like Walmart and Target who are trying to attract shoppers by offering similar shipping turnaround times.

Amazon offered the following guidance for the second quarter:

• Net sales between $59.5 billion and $63.5 billion
• Operating income between $2.6 billion and $3.6 billion

The guidance assumes that there are no additional business acquisitions, investments, restructurings or legal settlements during the second quarter.

On Friday, in its quarterly Form 10-Q filing with the Securities and Exchange Commission, Amazon disclosed that it spent $1.7 billion on video and music content during the first quarter, compared to $1.5 billion in the first quarter of 2018.

Amazon stock remained flat between Wednesday, April 24 ($1,901.75 per share) and Thursday, April 25 ($1,902.25 per share), but it spiked on Friday, April 26, ending at $1,950.63 per share, an increase of $48.38 over Thursdays price. This is down about $100 from Amazons 52-week high of $2,050.50.

Insider Take:

Despite increasing competition in cloud services, streaming video and music, and online retail, Amazon continues to churn out solid performance with no end in sight. The company continues to attract and retain Prime members and even at $119 per year for most members, those members are getting a lot of value, whether it is free two-day shipping, access to Amazon Originals like The Marvelous Mrs. Maisel, Bosch or The Man in the High Castle, better prices at Whole Foods Market, or streaming music. Amazon is constantly innovating and finding new ways to improve what it already does well.