Amazon Reports Strong 1Q Results Driven by Its Cloud-Computing Unit and Prime Video Ad Dollars
NEW YORK (AP) — Amazon on Tuesday reported strong results for the first quarter, driven by growth in its cloud-computing unit and new advertising dollars from its Prime Video streaming service.
The Seattle-based e-commerce giant said it brought in $143.31 billion in revenue in the first three months of this year, a 13% jump compared to the same period last year. Net income came out to $10.43 billion, or 98 cents per share. That soundly beat Wall Street analysts' expectations for 84 cents a share, according to FactSet.
“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,” Amazon CEO Andy Jassy said in a statement.
The nation’s biggest online retailer is coming off better-than-expected results for the holiday shopping period, when it saw strong consumer spending aided by discounts and faster shipping speeds. Amazon held another discount event in late March, right before the end of the first quarter.
Overall, U.S. consumer spending has continued to grow despite higher prices and higher borrowing costs resulting from the Federal Reserve’s interest rate hikes. The nation’s economy slowed down during the first three months of this year, but hiring has also remained robust.
Amazon's U.S. customers are being “very thoughtful” about their spending, Chief Financial Officer Brian Olsavsky said in a call with reporters. He noted consumers are looking for deals and trading down, and that the company is “particularly” seeing lower spending in Europe.
Aside from its core retail business, Amazon said first-quarter sales in its cloud computing unit, Amazon Web Services, amounted to $25.04 billion, up 17% from the same period last year.
AWS, whose customers are mostly businesses, has been the cornerstone of Amazon’s strategy in the competitive artificial intelligence race among big tech companies. The unit saw a slowdown in growth last year as companies cut back on costs amid concerns about the economy. However, Amazon has been using its AI offerings to push back on that trend and attract more enterprises to its cloud business.
