Despite fears of a recession, Amazon’s business continues to grow. (Representative)
Seattle, Washington:
Amazon is starting the year in black. The e-commerce giant reported first-quarter profit of $3.2 billion on Thursday, CNN Business reported Friday, well above analysts’ estimates.
The Seattle-headquartered firm reported a loss of $3.8 billion in the year-ago quarter.
The profit jump comes as Amazon has ramped up cost-cutting measures in recent months. The company has announced two rounds of layoffs, canceled products and nixed physical store expansions, according to CNN Business.
It also comes as key areas of Amazon’s business continue to drive growth despite lingering recession fears weighing on corporate and consumer spending.
The company’s revenue grew by 9 per cent during the quarter as compared to last year. CNN Business reported that Amazon expects net sales in the second quarter to rise between 5 percent and 10 percent from the same period a year earlier, or between USD 127 billion and USD 133 billion.
“The results suggest that ongoing cost-cutting measures are having a positive impact on Amazon’s business prospects,” said Jesse Cohen, senior analyst at Investing.com. “Amazon’s strong guidance for Q2 revenue is another indicator that the company may be starting to come out of the woods.”
Amazon Web Services, which has long served as a profit engine for the company, also experienced double-digit percentage growth during the quarter, another positive sign for its overall business.
CNN Business said AWS segment sales rose 16 percent from a year ago to US$21.4 billion.
“While our AWS business navigates companies spending more carefully in this macro environment, we continue to prioritize building long-term customer relationships,” Chief Executive Officer Andy Jassy said in a statement accompanying the earnings release. “
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