Amazon reported a boost in its quarterly profits Thursday, but the company missed revenue estimates, sending stocks lower in after-hours trading.
The Seattle-based tech company said it earned $13.5 billion for the April-June period, higher than the $10.99 billion industry analysts surveyed by FactSet had anticipated. Amazon earned $6.7 billion during the same period last year.
Earnings per share for the second quarter came out to $1.26, higher than analysts expectations of $1.03.
Overall, the company posted revenue of $148 billion, a 10% increase that fell slightly below analyst expectations of $148.67 billion. Amazon said it expects revenue for the current quarter, which ends Sept. 30, to be between $154.0 billion and $158.5 billion — lower than the $158.22 billion analysts had expected.
Like other tech companies, Amazon boosted its spending during the COVID-19 pandemic to keep up with higher demand from consumers who became more reliant on online shopping. But as demand cooled and wider economic conditions pressured other parts of its business, the company aggressively cut costs by eliminating unprofitable businesses and laying off more than 27,000 corporate employees.
The cost-cutting has led to growth in profits. However, Amazon is also feeling the benefits of the buzz around generative artificial intelligence, which has helped reaccelerate its cloud computing unit, Amazon Web Services, after it experienced a slowdown.
The company said Thursday that Amazon Web Services saw a 19% jump in revenue compared to the same period last year.
“We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth,” Amazon CEO Andy Jassy said in a statement.
The cloud computing unit, whose customers are mostly businesses, has been attempting to lure in more customers with new tools, including a service called Amazon Bedrock that provides companies with access to AI models they can use to make their own applications.
In April, Jassy said AWS was on pace for $100 billion in annual revenue. But the company is also expected to spend more this year to support the unit. It announced plans to put billions toward additional infrastructure in Saudi Arabia, Mexico and Mississippi, where the company has secured state incentives to build two data centers.
Meanwhile, revenue for the company’s core e-commerce business grew by 5%. Sales from its advertising business – which mostly comes from ad listings on its online platform – jumped by 20%.
Amazon’s results follow other earning reports this week from tech giants such as Microsoft, Meta and Google’s corporate parent, Alphabet Inc.
