The world’s largest retailer surpasses Wall Street expectations with $170 billion in revenue while continuing recent job cuts
Amazon’s profits have surged due to strong seasonal trading and robust growth in its dominant cloud computing business.
The world’s largest retailer reported revenue of $170 billion in the three months ending in December, a 14% increase from the same period in 2022. This exceeded Wall Street’s expectations, which were around $166 billion.
In the fourth quarter, net income surged to $10.6 billion from $278 million a year earlier as Amazon focused on cost-cutting measures and shifted away from rapid expansion following the onset of the pandemic. Earnings per share reached $1.03.
During after-hours trading in New York, the company’s shares rose by 5.5%.
Despite having cut 27,000 jobs last year, Amazon, valued at $1.6 trillion on the stock market, has continued with layoffs, albeit at a slower pace, in recent weeks.
On Thursday, Andy Jassy, the company’s chief executive, stated, “This Q4 marked a record-breaking holiday shopping season and concluded a strong 2023 for Amazon. While we achieved significant progress in revenue, operating income, and free cash flow, what we are most pleased with is the ongoing innovation and enhancements to customer experience across our businesses.”
Amazon has created an extensive digital ecosystem around its e-commerce platform, ranging from smart speakers to sports broadcasting. Through Amazon Web Services (AWS), it dominates the lucrative cloud computing market, although Microsoft, now valued at $3 trillion, has eroded its lead as companies strive to integrate artificial intelligence into their offerings.
The company revealed plans to introduce an AI-powered shopping assistant named Rufus into its app ahead of the earnings call. During the call, Jassy noted that Amazon’s AI offerings are “strongly appealing to customers,” although they have not yet significantly impacted the company’s revenue.
Regulators have moved to limit the company’s expansion: earlier this week, Amazon dropped a planned $1.4bn acquisition of the robot vacuum cleaner company iRobot due to opposition from European authorities. Last week, US regulators announced they would investigate the company’s dealings with emerging AI firms like Anthropic.
In the fourth quarter, revenue at AWS grew by 13% to $24.2bn. Jassy highlighted the continued strong performance of Amazon’s rapidly growing advertising business, which saw a 27% increase in sales to $14.7bn.
For the current quarter ending in March, Amazon projected sales growth of up to 13%. The company also anticipated a significant increase in operating profits, estimating a rise from $4.8bn to between $8bn and $12bn.
