Amazon Q1 results: E-commerce giant posts strong earnings, profit more than triples to $10.4 billion

Amazon Q1 results: E-commerce giant Amazon has reported a more than three-fold jump in its net income to $10.4 billion for the March quarter of 2024 compared to $3.2 billion in the first quarter of 2023, beating street estimates.

Cloud computing and advertising boosted its profits for the March quarter as Amazon reported a net income of $0.98 per diluted share against $0.31 per diluted share a year ago. Experts had projected a net income of $0.83 per diluted share.

Amazon reported a 13% growth in net sales at $143.3 billion in the March quarter compared to $127.4 billion in the first quarter 2023, the company said in a statement.

The North America region posted a 12% year-on-year rise in sales to $86.3 billion. International segment sales rose by 10% year-over-year to $31.9 billion in the March quarter.

The AWS segment reported a 17% year-over-year jump in sales to $25 billion. Operating income rose to $15.3 billion in the March quarter compared with $4.8 billion in the first quarter 2023.

Amazon is also a leading e-commerce player in India and also offers its AWS services in the country.

“Advertising efforts continue to benefit from the growth of our Stores and Prime Video businesses,” Amazon said.

AWS AI capabilities boosting growth rate

Andy Jassy, Amazon President and CEO said in a statement that the combination of companies renewing their infrastructure modernisation efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate which is now at a $100 billion annual revenue run rate.

Jassy said that stores business continues to expand selection, provide everyday low prices, and accelerate delivery speed – setting another record on speed for Prime customers in the first quarter.

The company also mentioned that US consumer spending continued to grow despite higher prices and higher borrowing costs. The economy slowed down during the March quarter but hiring has also remained robust.

Amazon expects 7-11% growth in net sales in Q2

Amazon in its Q2 financial guidance stated that net sales are expected to be between $144 billion and $149 billion, or to grow between 7% and 11% compared with the second quarter 2023.

This guidance anticipates an unfavourable impact of approximately 60 basis points from foreign exchange rates. In first quarter 2024 the impact from leap year added approximately 120 basis points to the year-over-year net sales growth rate.

Operating income is expected to be between $10 billion and $14 billion, compared with $7.7 billion in the second quarter 2023.