Image Credit: CNBC
Amazon.com Inc. delivered better-than-expected results for the first quarter, driven by strong performance in its core e-commerce business and cloud division. However, a softer-than-anticipated revenue forecast for the second quarter unsettled investors, sending the stock lower in after-hours trading.
For the three months ending March 31, Amazon reported net sales of $143.3 billion, up 13% year-over-year, beating Wall Street estimates of around $142 billion. Net income surged to $10.4 billion, or 98 cents per share, more than double the 31 cents per share it posted in the same quarter a year ago. The robust bottom line was bolstered by continued cost-cutting efforts and improved efficiency across its logistics and fulfillment network.
Amazon Web Services (AWS) remained a key revenue engine, generating $25 billion in sales, a growth of 17% year-on-year, as more businesses continue to migrate to cloud platforms. CEO Andy Jassy noted that AWS growth is stabilizing and showing signs of re-acceleration, particularly as enterprise clients ramp up AI-related investments.
In the e-commerce segment, strong consumer demand, particularly in North America, helped lift revenue. Amazon’s continued focus on same-day delivery and streamlining operations has contributed to faster order fulfillment and higher customer satisfaction. Advertising also proved to be a bright spot, with Amazon’s ad services revenue climbing 24% to $11.8 billion.
Despite the solid Q1 results, Amazon issued a muted Q2 forecast, projecting net sales between $144 billion and $149 billion, slightly below analyst expectations. The company attributed the cautious guidance to macroeconomic uncertainty and potential softness in consumer spending patterns during the upcoming quarter.
The announcement weighed on Amazon’s stock, which fell more than 3% in after-hours trading. Analysts noted that while the Q1 beat was encouraging, investors are increasingly focused on future growth drivers, particularly amid mixed signals from the broader retail and tech sectors.
Still, Amazon’s leadership remains optimistic. "We’re encouraged by the momentum we’ve seen in key areas like AWS and advertising," said Jassy, adding that the company will continue investing in innovation and long-term growth opportunities.
In summary, Amazon's first-quarter performance reflects solid operational execution and resilience in key business segments. However, the tepid Q2 outlook has cast a temporary shadow on investor sentiment, highlighting the delicate balance between near-term caution and long-term growth ambitions.
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