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Editor’s note: Story updated based on stock price fluctuation.
Amazon shares were up more than 11% in after-hours trading Thursday after the Seattle tech giant topped analyst expectations for both profits and revenue.
But its stock was down more than 2% later on Thursday after the company’s earnings call with analysts.
Amazon reported $127.4 billion in first quarter revenue, up 9% year-over-year. Net income was $0.31 per share, or $3.2 billion.
Analysts were expecting $124.5 billion in revenue, and earnings per share of $0.21.
Operating income came in at $4.8 billion, up from $3.7 billion in the year-ago quarter and above the high end of the company’s guidance.
Amazon’s cloud computing business reported revenue of $21.3 billion, up 16% from the year-ago period. Analysts were closely watching Amazon Web Services as it is a key profit driver but has faced slowing growth amid the broader tech spending slowdown and other macroeconomic conditions.
“We like the fundamentals we’re seeing in AWS, and believe there’s much growth ahead,” Amazon CEO Andy Jassy said in a statement.
Amazon continues to see companies looking for ways to optimize their cloud spend with the ongoing economic uncertainty, Amazon CFO Brian Olsavsky said on a call with reporters.
On a later, separate call with analysts, Amazon said it was seeing lower AWS revenue growth rates in April compared to the first quarter.
Much like its customers are looking for ways to trim expenses, Amazon itself has been in cost-cutting mode over the past year, laying off employees and axing various services and products.
In January it announced an 18,000-person layoff, the largest in the Seattle company’s history, and in March announced an additional 9,000 layoffs.
That brought the total to 27,000 job cuts, about 8% of Amazon’s corporate workforce, which previously numbered around 350,000 people.
Olsavsky on Thursday said some inflationary pressures are easing, citing lower shipping rates and electricity costs. After building too much warehouse capacity during the pandemic, Amazon continues to improve productivity within its delivery network, he said.
He added that consumers are “still looking to stretch their budgets further” and are focused on value.
Amazon stock had risen more than 5% on Thursday before market close. Shares are up more than 25% this year.
Alphabet, Microsoft, and Meta also saw shares rise following their respective earnings reports this week.
Here’s a breakdown of Amazon’s financials for the first quarter.
Online stores: Revenue was flat year-over-year at $51.1 billion. That compares to a 2% year-over-year decrease in Q4, and 3% decline in the year-ago quarter.
Amazon Web Services: Amazon’s cloud business was up 16% at $21.3 billion, with $5.1 billion in operating income, which was down 21% year-over-year. AWS had a 20% revenue growth rate in Q4, and 37% growth in the year-ago quarter.
Advertising: Along with AWS, advertising is one of Amazon’s higher-margin businesses. Advertising brought in $9.5 billion in revenue in the quarter, up 21% over a year ago. That compares to a 19% growth rate in Q4, and 23% growth in the year-ago quarter.
Third-party seller services: Amazon has been expanding services and products for third-party merchants in recent years. Revenue from third-party seller services was up 18% to $29.8 billion.
Shipping costs: Amazon continues to expand one-day shipping options and has dealt with increased transportation and fuel costs. Amazon spent $19.9 billion on shipping in Q1, up 2%.
Physical stores: The category, which includes Whole Foods and Amazon Go stores, posted revenue of $4.9 billion, up 7%. Amazon has been closing various stores over the past few years.
Headcount: Amazon now employs 1.47 million people, down 10% year-over-year. That figure does not include seasonal and contract workers.
Prime: Subscription services revenue, which includes Prime memberships, came in at $9.6 billion, up 15%. Amazon disputed a recent analyst report that said the company’s Prime growth had plateaued in the U.S.
Guidance: The company’s Q2 sales forecast of $127 billion to $133 billion came in line with estimates. Operating income for the second quarter is expected to range between $2 billion and $5.5 billion.
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