Amazon’s Q1 earnings report beats expectations, shares jump more than 7 percent
Amazon shares jumped on Thursday after the e-commerce colossus said it will make much more money than expected in the first quarter of 2023.
Amazon reported a profit of $3.2 billion on sales that rose 9 percent to $127.4 billion in the quarter.
Net income was about $1 billion more than analysts had predicted, and Amazon shares rose more than 7 percent to $117.87 in after-market trading after the results were released.
“Our teams are doing a lot to serve customers, especially in an uncertain economy,” said Amazon CEO Andy Jassy.
“Our Retail business continues to improve the service costs of our delivery network and at the same time speeds up the delivery of products to customers.”
In March, Jassy presented a plan to cut 9,000 new jobs from the e-commerce giant’s workforce after 18,000 were cut in January.
“Given the uncertain economy … and uncertainty in the near future, we have decided to be more streamlined in our costs and staffing levels,” Jassy said in a memo at the time.
The layoffs represent a smaller proportion of Amazon’s total workforce, which employed up to 1.5 million people as of December 2022, compared to cuts at some other tech giants.
Amazon’s Jassy told employees that the additional layoffs were necessary as the company looks for a way to downsize after years of steady hiring.
That was largely due to the coronavirus pandemic, as users in Amazon’s core markets turned to the Internet for shopping and entertainment, boosting the Seattle-based company.
The layoffs are part of the giant’s austerity campaign, which also saw plans to open a new corporate headquarters in the Washington, DC area stalled, although the company said this was only a temporary measure.
Revenue at Amazon’s AWS cloud computing unit rose 16 percent to $21.4 billion, but expenses ate into operating profit of $5.1 billion, compared with $6.5 billion in the same quarter a year ago, according to an earnings report.
“Amazon’s better-than-expected results in key AWS and advertising profit units indicate that the company and the digital advertising sectors may be on a turnaround,” said Andrew Lipsman, principal analyst at Insider Intelligence.
“For the first time in many quarters, Amazon may finally have some wind behind it,” he added.
“While our AWS business is driven by companies that spend more cautiously in this macro environment, we continue to prioritize building long-term customer relationships,” Jassy said.
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