E-commerce and cloud computing company Amazon.com (NASDAQ:AMZN) continued its strong momentum in its first quarter, particularly on its bottom line. Earnings per share more than doubled during the period, obliterating analyst estimates for the key metric.

The company's strong growth shows how Amazon can continue to deliver significant value for shareholders even as revenue growth decelerates.

Boxes on a conveyor belt in an Amazon fulfillment center

Image source: Amazon.com.http://media.corporate-ir.net/media_files/IROL/17/176060/NewImageFiles/Cyber%20Monday_7.jpg

Decelerating top-line growth

Amazon's first-quarter revenue increased 17% year over year to $59.7 billion. While this growth rate was in line with what analysts were expecting and at the high end of management's guidance for revenue between $56 billion and $60 billion, it notably represents a meaningful deceleration from 20% revenue growth in the fourth quarter of 2018 and 29% growth in Q3. 

Part of Amazon's deceleration in revenue growth is because Whole Foods' financial results, which feature much slower growth, are now fully accounted for in both the current quarter and the year-ago quarter. But revenue growth has decelerated in other areas recently as well, including third-party seller services, subscription services, and even Amazon Web Services (AWS). The cloud computing segment's first-quarter revenue, for instance, rose 41% year over year, down from 45% growth in Q4 and 46% in Q3. Representing 13% of revenue, a slowdown in Amazon's AWS growth weighs meaningfully on the company's total revenue growth rate.

Surging profitability

But Amazon isn't hurting. First-quarter net income was $3.6 billion, or $7.09 per share. This is up from $1.6 billion, or $3.27 per share in the first quarter of 2018. Analysts, on average, expected earnings per share of just $4.72.

This net income was helped by a widening operating margin and soaring operating income. Amazon's annual operating margin has widened from 2.3% in 2017 to 6.2% in the 12-month period ending March 31. First-quarter operating income for the quarter was $4.4 billion, up from $1.9 billion in the year-ago period. This operating income was more than $1 billion dollar higher than management's guidance for first-quarter operating income between $2.3 billion and $3.3 billion.

Perhaps the best way to highlight Amazon's momentum when it comes to profitability is its skyrocketing free cash flow, or the cash left over after both regular operations and capital expenditures are accounted for. Amazon's trailing-12-month free cash flow is $23 billion, up from $7.3 billion in the 12-month period ending March 31, 2018.

A cautious outlook

Looking ahead, Amazon is guiding for its operating income in its second quarter to be between $2.6 billion and $3.6 billion. While midpoint of this guidance range does represent slight growth compared to the $3 billion in operating income Amazon recorded in the second quarter of 2018, this is a conservative outlook when viewed next to the company's recent momentum.

Will Amazon crush its operating income guidance once again in Q2? Monstrous growth in profitability recently suggests there's a good chance.