Technology
Wednesday, May 1st, 2024 2:24 pm EDT
Key Points
- Amazon reported better-than-expected earnings and revenue for Q1, fueled by growth in advertising and cloud computing.
- Key financial highlights include earnings per share of 98 cents, surpassing the expected 83 cents, and revenue of $143.3 billion, slightly above the anticipated $142.5 billion.
- Operating income soared over 200% to $15.3 billion, with AWS contributing 62% of total operating profit, and net income more than tripled to $10.4 billion.
Amazon exceeded expectations in both earnings per share and revenue for the first quarter, propelled by significant growth in advertising and cloud computing. The company’s earnings per share stood at 98 cents, surpassing the 83 cents expected by LSEG, while revenue amounted to $143.3 billion, slightly higher than the anticipated $142.5 billion. Operating income soared over 200% to $15.3 billion, demonstrating the efficacy of Amazon’s cost-cutting strategies and focus on efficiency, with AWS contributing 62% of the total operating profit. Net income also more than tripled to $10.4 billion, or 98 cents per share, compared to $3.17 billion, or 31 cents per share, a year ago. Sales experienced a 13% increase from the previous year, reaching $127.4 billion. Looking ahead, Amazon anticipates continued profitability growth for the second quarter, projecting operating income between $10 billion and $14 billion, up from $7.7 billion in the previous year, with revenue expected to range from $144 billion to $149 billion. AWS revenue accelerated by 17% to $25 billion in the first quarter, surpassing analyst forecasts, indicating a potential rebound in cloud spending after a period of slowdown. CEO Andy Jassy’s disciplined approach to spending, coupled with the expansion of profitable services like advertising, cloud computing, Prime memberships, and the third-party marketplace, has been instrumental in driving Amazon’s earnings growth. Despite laying off over 27,000 employees since late 2022, Amazon’s advertising unit witnessed a 24% surge in sales, particularly following the introduction of ads on Prime Video. This underscores the increasing significance of Amazon’s advertising business as a major revenue contributor. Moreover, revenue from third-party seller services grew by 16% year over year to $34.5 billion, reflecting continued robust performance in this segment. Despite its substantial cash reserves, Amazon remains distinct among mega-cap internet companies by not implementing a quarterly dividend, unlike Meta and Alphabet, which recently announced dividends and stock buyback plans.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/30/amazon-amzn-q1-earnings-report-2024.html
