Amazon Surges As Q2 Earnings, Forecast Top Wall Street Estimates
Solid ad sales, and a robust revenue forecast, helped offset moderating growth rates for Amazon Web Services.
Updated at 4:19 pm EDT
Amazon (AMZN) - Get Free Report posted stronger-than-expected second quarter earnings Thursday, and forecast solid near-term sales, as the world's biggest online retailer saw robust ad revenues that partly offset moderating growth in its cloud services division.
Amazon said net income for the three months ending in June was pegged at $6.7 billion, or 65 cents cents per share, swinging from a loss of 20 cents per share over the same period last year and well ahead of the Street consensus forecast of 35 cents per share.
Operating income more than doubled to $7.68 billion, smashing the Street forecast of $4.72 billion. The group's operating margin also impressed at 5.7%, again well ahead of the Refinitv forecast of around 3.5%.
Revenues rose 10.9% from last year to $134.4 billion, also firmly ahead of analysts' estimates of a $131.5 billion tally. Amazon Web Services contributed $22.1 billion in revenues, rising 12% from last year, slowing four percentage points from the three months ending in March but coming in just ahead of the Street forecast of around $21.7 billion.
Online sales were 4.2% higher from last year to $53 billion, suggesting moderately improving consumer spending over the first three months of the year, with the tally largely matching Street forecasts. Ad sales rose 22% to $10.68 billion.
Looking into the current quarter, Amazon said it sees operating income of between $5.5 billion and $8.5 billion on revenues in the range of $138 billion to $143 billion, compared to the Refinitiv forecast of around $138.3 billion.
"It was another strong quarter of progress for Amazon,” said CEO Andy Jassy. “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded."
"Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases," he added.
"We’re also continuing to see strong demand for our advertising services as the team keeps innovating for brands, including the ramp up for Thursday Night Football with the ability for advertisers to tailor their spots by audience and create interactive experiences for consumers.”
Amazon shares were marked 672% higher in after-hours trading following the earnings release to indicate a Friday opening bell price of $138.17 each, a move that would extend the stock's year-to-date advance to around 65%.
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