Amazon surges after £102bn sales bonanza: Online giant crushes Wall Street forecasts as it posts stellar first quarter results
Shares of online shopping giant Amazon soared after it became the latest tech giant to crush Wall Street’s forecasts.
The world’s largest online retailer posted revenues of £102 billion for the first three months of the year, up 9 percent from 2022 and exceeding the £100 billion forecast by analysts.
Amazon also posted a quarterly profit of £2.6bn after posting a loss of £3bn in the same period of 2022 as the dominance of online shopping compounded the declines caused by a slump in consumer confidence amid the cost of livelihood averted.
“There’s a lot of positives about how our teams are delivering to customers, especially in an uncertain economy,” said Amazon CEO Andy Jassy.
Amazon posted revenue of £102bn for the first three months of the year, up 9% from 2022 and exceeding the £100bn forecast by analysts
Shares rose as much as 10 percent in after-hours trading on Wall Street, taking the stock to its highest level in six months, but still about 18 percent lower than the same time last year.
Its cloud computing arm, Amazon Web Services (AWS), saw profits fall from £5.2bn to £4.1bn from £4.1bn as companies cut back on software fears for the health of the global economy.
Despite that, Jassy said, “We like the fundamentals we’re seeing in AWS and believe there’s a lot of growth ahead.”
The numbers this week followed results from rival tech giants, including Google owner Alphabet and Microsoft.
Both firms defied concerns about a slowdown in the cloud computing market, with Google Cloud posting its first-ever profit.
The Amazon numbers rounded off a busy and mostly positive week of earnings for Big Tech, marking a change in fortunes for the industry.
Equity prices fell for much of last year as growth prospects were dented by rising interest rates and economic gloom.
But technology stocks have bounced back. Meta, the owner of Facebook, posted its first revenue increase in 12 months this week, as both Microsoft and Alphabet topped estimates.
Analysts also kept a close eye on Amazon’s costs as the company is in the middle of a job-cutting program that is expected to see another 9,000 employees disappear across several business lines, including AWS and its streaming platform Twitch.
That follows the loss of 18,000 in an earlier round of job cuts — bringing the total to 27,000 in what is the largest contraction in Amazon’s nearly 30-year history.
Alphabet is also laying off 12,000 workers worldwide, while Microsoft has let go about 10,000 and Meta has cut 21,000 jobs.
The series of cuts comes as many tech companies hired thousands of employees during the pandemic, when lockdown measures created massive demand for communications technology and online delivery.
But with the easing of restrictions and rising inflation, many have been forced to rein in their spending.
The massive layoffs haven’t come cheap, however, as Meta revealed a £917m hit in its first quarter figures as a result of the restructuring.
It was also reported last week that the company was planning to cut more than 10 percent of its UK workforce and close the London office of its photo-sharing app Instagram, despite the branch only opening less than a year ago .
Social media companies including Meta have taken the brunt of increasing competition from TikTok, the video app from Chinese company Bytedance, while lower corporate spending on advertising and cloud computing has weighed on the likes of Alphabet, Microsoft and Amazon.