Although Amazon's cloud computing division AWS continued to slow down, the company's first-quarter sales and earnings were greater than expected, which helped boost its shares in after-hours trade. The Seattle-based corporation recorded a 9 gain in revenue from the 116.4 billion it reported for the same period last year to the 127.4 billion it brought in for the January-March quarter.
Although Amazon's cloud computing division AWS continued to slow down, the company's first-quarter sales and earnings were greater than expected, which helped boost its shares in after-hours trade. The Seattle-based corporation recorded a 9% increase in sales from the same time last year to $116.4 billion, to $127.4 billion for the January-March quarter. FactSet's analysts had predicted $124.6 billion.
Profits exceeded the $2.24 billion that industry experts had predicted by $3.2 billion, or 31 cents per share. Additionally, it represents a significant improvement over the same period last year, when the world's largest online retailer announced its first quarterly loss in years, primarily due to a decline in the value of its investment in Rivian Automotive, a manufacturer of electric vehicles.
In after-hours trading, Amazon's shares increased by 9%.
Major IT businesses had a hectic results week that will be concluded by the report on Thursday. In after-hours trading on Wednesday, the stocks of Facebook's parent company Meta rose as a result of Meta exceeding forecasts for profit and sales. Microsoft reported an increase in earnings on Tuesday, which was mostly due to Azure, its cloud business, which had lately had some growth slowdowns.
According to Google, its cloud business expanded significantly by 28%, generating its first operational profit. But compared to the same time last year, it expanded more slowly.
In his annual shareholder letter, delivered earlier this month, Amazon CEO Andy Jassy stated that AWS, the market leader in the cloud, was experiencing short-term challenges due to businesses' increased caution in investing due to the ongoing economic unpredictability. The business said on Thursday that the segment's first-quarter growth was 16%, above analyst estimates but well behind the segment's 37% annual growth rate.
Company executives have also stated that consumers are seeking to minimize expenses whenever they can and are more aware of their expenditures. Additionally, many consumers have stopped relying on e-commerce due to the epidemic, which at the time caused Amazon to announce record income statistics.
In the first quarter, Amazon's online retail sector showed no increase. Taking into account currency rates, it increased by 3%.
Along with slowing online sales and worries that the United States could enter a recession, Amazon has also been reducing its spending. The corporation started lowering its investment last year by postponing some of its warehouse expansion plans and attrition-driven personnel reductions in its sites.
Over the previous two quarters, it has stepped up cost-cutting efforts by eliminating 27,000 corporate positions across a variety of business groups, including devices, advertising, AWS, and Twitch, the well-known live streaming service it purchased in 2014.
Additionally, it has shut down a number of enterprises that weren't profitable, including the video chatting gadget Amazon Glow, the subsidiary fabric.com, and the healthcare firm Amazon Care. The business announced on Wednesday that it will discontinue its health-focused Halo devices and associated membership program on August 1.
The company said in February that it will halt development plans and close some of its Amazon Fresh and Go convenience outlets while it looked for the ideal recipe for its food business. The second phase of Amazon's headquarters in northern Virginia has also been put on hold. When the first phase of the development opens in June, it anticipates hiring thousands of people, and it has requested $152.7 million in state incentives to attract those jobs to Virginia.
Jassy expressed assurance that the business could get its costs under control. Additionally, he stated that Amazon will keep growing its investments in a variety of fields outside its main business, including healthcare, generative AI, and Kuiper, a satellite broadband initiative the firm revealed in 2020.
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