E-commerce giant Amazon reported
stronger-than-expected third quarter results on Thursday, with significant
growth in cloud computing and a return to profitability in its international
segment.
The Seattle-based tech titan posted net sales of 158.9 billion dollars for the
quarter ending September 30, up 11 percent from the same period last year,
with net profit up to 15.3 billion dollars.
Amazon Web Services (AWS), the company’s cloud computing division,
continued its robust performance with sales increasing 19 percent
year-over-year to 27.5 billion dollars.
The strong cloud performance comes amid increasing competition for
AI-related services from Microsoft and Google.
Like its rivals, AWS has invested heavily in artificial intelligence,
building out data centers and the computing capacity that is required to
deliver AI to cloud customers.
In a turnaround, Amazon’s international segment reported an operating
profit of 1.3 billion dollars, compared to a small loss in the same quarter last
year.
North American operations also showed improvement, with operating profit
rising to 5.7 billion from 4.3 billion dollars year-over-year.
The company also saw a 19 percent rise in advertising sales, as that
business becomes takes on a greater share of revenue on the platform.
“As we get into the holiday season, we’re excited about what we have in
store for customers,” said Amazon CEO Andy Jassy.
He highlighted the success of Prime Big Deal Days and noted strong
performance from the company’s new Kindle lineup.
The company has also announced plans to expand its Amazon Pharmacy Same-Day
Delivery service to nearly half the US, signaling a continued focus on
healthcare services despite some doubts by investors on the sector.
Looking ahead to the crucial holiday quarter, Amazon forecasts net sales
between 181.5 billion and 188.5 billion dollars, representing growth of seven
percent to 11 percent compared to the same period in 2023.
That helped send the Amazon share price surging by five percent in extended
trading.
“Amazon continues to be the primary beneficiary of the US consumers’ shift
to online shopping and a healthy Prime Day helped boost revenues for the
retail and ad businesses,” said Emarketer principal analyst Sky Canaves.
“The bind for investors is that Amazon has had to increase AI-related
spending for AWS to keep up with demand and defend its market share,” Canaves
added.
But the giant is in “a relatively good position since it has been steadily
building (cloud) capacity and faces fewer constraints” than its rivals.
The rosy results came a day after Microsoft and Meta failed to impress
investors, sending their shares sharply lower even though earnings beat
expectations.
That followed better-than-expected results from Google-parent Alphabet on
Tuesday.(AFP)
