A few days ago, Amazon announced its results for the second quarter of 2023. The financial figures well exceeded analysts’ expectations, with a substantial growth in revenues that pushed the share price up on the stock exchange.
Amazon’s figures for the second quarter
In detail, earnings per share amounted to 65 cents against the 35 cents expected. Revenues rose to $134.4 billion against the $131.5 billion Wall Street had hoped for. Revenues from Amazon Web Services grew to 22.1 billion against 21.8 billion. Revenues from advertising were 10.7 billion against the expected 10.4 billion.
With such a calling card, the second quarter of the year closed with record numbers that hadn’t been seen since the fourth quarter of 2020. The good profit boost indicates that CEO Andy Jassy’s efforts to streamline costs are indeed starting to pay off.
Last year, in fact, in order to streamline its massive production machine Amazon launched the biggest wave of layoffs in its history. Since last autumn, it has cut 27,000 jobs, freezed hiring and reduced various personnel expenses.
Forecast for Amazon’s Future
For the third quarter, Amazon expects revenues to be between 138 and 143 billion USD, with a trend growth between 9% and 13%. This number exceeds analysts’ average expectation of $138 billion.
Amazon has finally returned to a double-digit growth rate after a perhaps physiological slowdown. The growth rate had lingered in the single digit zone for five of the last six quarters. This was probably due to customers curbing their spending owing to economic uncertainty. The company’s top management now attributes this recent acceleration mainly to the improved performance of AWS.
Revenues from the sales of AWS services have actually increased by 12 per cent in the second quarter. They have risen to $22.1 billion, well above the $21.8 billion that Wall Street expected. AWS thus accounts for 70% of Amazon’s $7.7 billion operating profit.
Finally, the company posted a net profit of $6.7 billion, or 65 cents per share. Whereas in the same period last year they had posted a loss of $2 billion, or 20 cents per share. At the time, the negative result was attributed to the firm’s diminished investment in the electric vehicle company Rivian.
Amazon also stated in its press release that some of its artificial intelligence solutions are already being used by numerous customers, including Royal Philips, 3M, Old Mutual, and HSBC. Furthermore, advertising continues to be a booming business for Amazon, with quarterly revenues in the period increasing by 22% to $10.7 billion.