Amazon off to ‘good start’ in year as Q1 sales rise 13%
Amazon came out of the gate fast in its first quarter, reporting better-than-expected earnings and revenue.
The company's net income more than tripled, rising to $10.4 billion, or $0.98 per diluted share, in the quarter ended March 31, compared with $3.2 billion, or $0.31 per diluted share, in the year-ago period. Analysts had expected earnings per share of $0.83.
Operating income surged 20% to $15.3 billion, compared with $4.8 billion in first quarter 2023. Amazon's profitability has been helped in part by ongoing cost-cutting, including layoffs, with the most recent reportedly in its Amazon Web Services cloud computing segment.
Net sales rose 13% to $143.3 billion, topping estimates of $142.5 billion. North America segment sales increased 12% year-over-year to $86.3 billion. International segment sales increased 10% year-over-year to $31.9 billion.
Sales in Amazon Web Services increased 17% year-over-year to $25 billion. Amazon's advertising business also saw a big jump in the first quarter, increasing 24% to $11.8 billion, as the company — for the first time — started running ads across its Prime Video service.
Sales in Amazon's physical sales, which includes Whole Foods Market and Amazon Go, rose 6% to $5.2 billion. Subscription services revenue, which includes Prime memberships, increased 11% to $10.7 billion.
“It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results,” said Andy Jassy, Amazon president and CEO.
He continued that the combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s artificial intelligence capabilities is reaccelerating AWS’s growth rate, which is now at a $100 billion annual revenue run rate.
On the retail front, Amazon's stores business continues to expand selection, Jassy noted, providing everyday low prices and accelerated delivery speed while lowering its cost to serve. The company said it set records for Prime delivery speeds during the quarter, wth nearly 60% of Prime member orders across the top 60 largest U.S. metro areas arriving the same or next day.
"It’s very early days in all of our businesses and we remain excited by how much more we can make customers’ lives better and easier moving forward," Jassy said.
For the second quarter, ending in June, Amazon expects net sales to grow 7%-11%, to be between $144 billion and $149 billion. It expects operating income to be between $10 billion and $14 billion, up from $7.7 billion in the same time period last year.
To read Amazon's first-quarter earnings statement, click here.