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E-commerce giant Amazon far exceeded its own and the market's expectations in the past quarter. This was revealed yesterday after trading hours. However, investor enthusiasm quickly ebbed away.

The stock market reaction: At first the price shot up 9 percent in after-hours trading, but the mood turned completely. Currently, the stock is down 2 percent in preliminary trading, followed this afternoon by the reaction of the entire stock market.

The figures in a row:

  • Operating income came to $4.8 billion in the first quarter of 2023, from $3.7 billion in the same period a year earlier. Amazon, which like other tech giants is , was counting on an operating profit of $0 billion to $4 billion in advance.
  • Below the line, Amazon was left with earnings of $3.2 billion or $0.31 per share, where analysts on average assumed $0.21 per share.
  • Quarterly revenue up 9 percent to $127.4 billion. The market was assuming $124.6 billion. Amazon itself was aiming for sales of $121 billion to $126 billion.

Doubts about growth AWS

Turning sentiment: The stock market initially reacted enthusiastically to those puffy numbers. But the sentiment turned after the company's telephone explanation. In it, chief financial officer Brian Olsavsky tempered expectations about its cloud division, Amazon Web Services (AWS), a major growth driver for Amazon.

"As expected, customers continue to evaluate ways to optimize their cloud spending in response to difficult economic conditions in the first quarter," he stated.

  • That statement makes investors fear a further slowdown in growth at AWS.
  • Revenue at AWS was still up 16 percent year-over-year last quarter, to $21.35 billion. That revenue growth at this branch was lower than the 20 percent growth in the previous quarter, however.
  • At cloud branch, quarterly operating profit came in at $5.1 billion, up from $6.5 billion a year earlier.

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