SAN FRANCISCO (AFP) – E-commerce titan Amazon on Tuesday said profit in the first three months of 2024 tripled as its cloud, ads, and retail businesses thrived.
Amazon shares were up about one percent in after-market trades that followed release of the earnings figures, with Wall Street keeping a close eye on the impact of AI as well as costs involved.
“It was a good start to the year across the business,” Amazon chief executive Andy Jassy said in an earnings release.
The Seattle-based company reported USD10.4 billion in profit on revenue of USD143.3 billion, compared with a profit of USD3.2 billion on USD127.4 billion in sales in the same period a year earlier.
“Amazon opens its new fiscal year with a robust set of numbers that show it has mostly brushed off pressures in the consumer economy,” GlobalData managing director Neil Saunders said in a note to investors.
Sales at Amazon online stores grew by seven per cent in the quarter despite competitive pressure from rivals such as Shein and Temu, according to Saunders.
“Our customer data still shows that Amazon is a focal point for those consumers wanting value for money and convenience,” Saunders said.
“We also believe that Prime members are leaning more heavily into Amazon to maximise value from their subscriptions.”
Growth in online store sales indicated last year’s turnaround at Amazon’s e-commerce business is continuing, according to Emarketer senior analyst Blake Droesch.
“While the core e-commerce business is no longer the biggest growth driver, it remains an essential component of the Amazon flywheel, particularly in propelling its ad business,” Droesch said.
Jassy said the allure of AI capabilities was getting companies to bring infrastructures up to date relying on Amazon’s AWS cloud computing division, which is on track to bring in a hundred billion dollars over the course of the year. “We’ve seen considerable momentum on the AI front,” Jassy said on an earnings call. “Companies are pursuing this relatively low hanging fruit of modernising their infrastructure.”
AWS revenue in the recently ended quarter was USD25 billion compared with USD21.4 billion in the same period last year, the earnings figures showed.
Jassy also pointed to Amazon’s young ad business that was gaining momentum at its online shop and Prime streaming television service.
Ad sales brought in USD11.8 billion in an increase of 24 per cent from the same quarter a year earlier, Amazon reported.
The tech giant has also been driving down costs, he added, eliminating some 27,000 jobs last year.
