Operating profit surged over 200% during the period to $15.3 billion, significantly outstripping revenue growth, indicating that the company's cost-saving strategies and emphasis on efficiency are strengthening its bottom line. AWS contributed 62% of the total operating profit. Net income also tripled to $10.4 billion, or 98 cents per share, from $3.17 billion, or 31 cents per share, in the previous year.
Sales rose by 13% from $127.4 billion a year earlier.
Amazon anticipates further profitability growth in the second quarter, albeit at a more moderate pace. The company projects operating income to range from $10 billion to $14 billion, up from $7.7 billion a year ago.
Revenue for the current quarter is forecasted to be between $144 billion and $149 billion, representing a growth rate of 7% to 11%. Analysts had expected growth of 12% to $150.1 billion, according to LSEG.
AWS sales
accelerated by 17% in the first quarter to $25 billion, surpassing Wall Street's projection for sales growth of 12% to $24.5 billion. Over the past year, AWS growth has decelerated as businesses trimmed their cloud expenditure. However, Amazon executives have noted that cost optimizations are leveling off, and they've suggested that demand for generative artificial intelligence could benefit its cloud business.
Amazon's earnings growth has been fueled partly by extensive cost reductions, adjustments to its fulfillment operations, and the stabilization of cloud expenditure. CEO Andy Jassy has adopted a more disciplined approach to the company's spending while expanding profitable services like advertising, cloud computing, Prime memberships, and its third-party marketplace.
The company has downsized its workforce by over 27,000 employees since late 2022, with layoffs extending into 2024. In the first quarter, Amazon laid off hundreds of employees in its health and AWS divisions.
Amazon's advertising segment experienced a 24% sales surge, slightly ahead of consensus estimates. This marks the first report since Amazon began running ads on Prime Video, a move analysts
believe could yield substantial revenue in the long term.
The ad business, growing faster than retail or cloud computing, has become a significant profit driver for Amazon and a key player in online advertising.
The overall advertising market resumed growth after a challenging 2022 when brands reduced spending due to inflation and rising interest rates.
Meta,
Snap, and Google parent
Alphabet all reported first-quarter results last week, showing better-than-expected revenue growth, primarily driven by improvements in their ad businesses.
Revenue from third-party seller services, including commissions collected by Amazon, fulfillment, shipping fees, and other charges, continued to surge. Sales in this segment grew by 16% year over year to $34.5 billion.
Amazon stands out among mega-cap internet companies as it has yet to introduce a quarterly dividend, despite cash and equivalents increasing to $73.9 billion in the quarter from $54.3 billion a year earlier. Meta announced its
first dividend in February at 50 cents per share, and Alphabet followed suit, announcing plans to pay a dividend of 20 cents per share last week. These companies also disclosed intentions to repurchase tens of billions of dollars in stock.
