Amazon.com Inc.’s cloud business again drove a better-than-expected profit in the online retailer’s first quarter — much better than expected, in fact.

Amazon Web Services (AWS), which provides online computing and storage services to many companies from small startups to Netflix Inc. and Comcast Corp., on Apr. 28 reported a $604 million operating profit. That’s more than triple a year ago, on revenues of $2.6 billion, up 64 percent. The rest of Amazon’s business, which accounts for 90 percent of overall revenues, reported an operating profit of $467 million.

Although founder and Chief Executive Jeff Bezos (pictured) focused his comments in the earnings release on devices such as the Fire tablets and Echo voice-controlled speaker, it was AWS that shined. “AWS generated more profit than the rest of the company combined,” said Jan Dawson, chief analyst with Jackdaw Research.

As a result, the company earned a net profit of $1.07 a share, blasting past the 58 cents a share that analysts had expected. Revenues rose 28 percent to $29.1 billion, more than a billion dollars over what analysts forecast and at the top of the range Amazon itself had provided. Net income hit a record $513 million in the first quarter, compared with a loss of $57 million, or 12 cents a share, a year ago.

Looking ahead to the current quarter, Amazon forecast revenues between $28 billion and $30.5 billion, the midpoint well above Wall Street forecasts of $28.3 billion.

Not surprisingly, investors liked what they saw. Amazon’s shares, already up about 40 percent in the past year, were shooting up more than 12 percent in after-hours trading after falling a fraction of 1 percent on the day, to $602.

Analysts were looking for AWS to provide profits to offset heavy investment in everything from distribution centers to original video content to consumer electronics devices such as the Echo. Last year, AWS posted $7.9 billion in revenues, up 70 percent for a growth rate four times the retail operation’s. Morgan Stanley forecasts that revenues will grow to $12 billion this year and $16 billion in 2017.

The scale of the unit’s profits this quarter is likely to draw even more investor attention to the business. “AWS continues to become a very important source of revenues and profits,” Dawson said.

The results also indicate that Amazon is not suffering much yet from increased competition for cloud services from companies such as Microsoft Corp., IBM and Google Inc., as well as traditional tech companies such as Hewlett-Packard Enterprise that offer similar cloud services inside customers’ premises. Google has recently added Spotify Ltd. and Apple to a customer list that already included The Home Depot and Coca-Cola Co.

AWS did post a lower profit margin, at 23.5 percent versus 28.6 percent in the fourth quarter and 25 percent in the third quarter. It wasn’t immediately apparent whether that was the result of competitive pressures.

But Amazon Chief Financial Officer Brian Olsavsky said on the earnings conference call that AWS margins would be “bumpy over time” because of variances in investment in data centers, price reductions and cost efficiencies. Amazon plans to bring six new data center regions online this year.

In any case, Amazon appeared to keep costs in line. Operating costs for technology and content rose 28 percent, in line with the revenue increase, and capital spending for the trailing 12 months was $4.9 billion, up less than 5 percent from a year ago. Free cash flow, the key metric Amazon aims to grow, doubled to $6.4 billion from 2015’s first quarter.

AWS still looks to remain firmly in the lead and, as a result, will continue to be a driver for Amazon’s profit growth, Ben Schachter, an analyst with Macquarie Capital Inc., wrote in an Apr. 29 note to clients. “AWS will face increasing competition from MSFT, GOOG, and others, but the lead it has built up over many years will not easily fall,” he wrote.

What’s more, the results are a marked contrast to earnings reports from enterprise information technology leaders such as Intel, IBM and even Apple, which have reported declining revenues. “The rest of the IT industry is fighting major headwinds,” said Brian Gracely, an analyst with Wikibon, owned by the same company as SiliconANGLE.

And AWS now seems likely to become even more of a driver of Amazon’s value. Robert Peck, an analyst with the investment bank SunTrust Robinson Humphrey, said in an Apr. 4 report that the unit is worth more than $100 billion, more than a third of the entire company’s $284 billion valuation.

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