Amazon flipped its winter slide to report strong first quarter results.
Revenue rose 9% from the same period last year to $127.4 billion, and net income soared to 31 cents per share against a loss of 38 cents in 2022, the company said Thursday. Both numbers beat analyst expectations.
Amazon CEO Andy Jassy said in a statement:
Investors celebrated by pushing the stock up 10% in after-hours trading. Analysts expected earnings of 21 cents per share and earnings of $124.55 billion for him.
Amazon, like other tech companies, did very well in the early days of the pandemic when everyone stayed home, but has since had some problems. Management is downsizing after expanding its retail distribution network to handle
Since November, the company has confirmed 27,000 layoffs. Jussy, who took over as CEO in the summer of 2021 to replace Jeff Bezos, has aggressively cut costs while emphasizing Amazon’s long-term commitment to investing in new ideas.
Amazon shares continue their recent rally, rising 4% on Thursday before the market closed. But stock prices have fallen more than a third since the peak of the pandemic. This is a problem for companies where equity grants make up a significant portion of an employee’s salary.
Expectations were low for Amazon before the report. Overall revenue in the last quarter, which included the all-important holiday season, was up only 9% year-over-year. That was about half the amount Amazon shareholders were accustomed to. Profits almost evaporated in the October-December period.
Amazon’s Big Tech peers reported surprisingly good results this week after a harsh winter of layoffs, weak results and falling expectations. Facebook’s parent company, Meta, saw its earnings fall for his third straight quarter, while its stock rose 10%. Google’s ad search business outperformed expectations, and Microsoft’s cloud computing business helped the company achieve impressive results.
For years and decades, Amazon has chosen growth over profit. Making money took a backseat to establishing new markets. Sometimes this worked and changed the fundamental nature of the company. The Amazon Web Services division was a pioneer in data storage and grew so quickly that its profits helped make up for Amazon’s meager revenues on the retail side.
Meanwhile, many small ventures remained small. When to shut them down is a decision Amazon could have postponed for years, but no longer. Rising interest rates and reticent consumers forced their hand.
This week, the company ended its Halo line of health and fitness equipment. Amazon has big ambitions in healthcare, but fitness equipment is a crowded market that Halo just couldn’t break through. Amazon also recently closed Book Depository, an online bookstore it acquired in 2011 and operated independently of its main book sales division.
Mr. Jassy this month Annual Letter to Shareholders The change was good. “I like the way our team has responded to the changes that are ahead of us, so I am optimistic about the future,” he wrote.
