(New York) Amazon has signed, like its major competitors, a first quarter better than expected, which confirms the recovery of the group’s trajectory, in a difficult economic context, which encourages managers to remain vigilant on costs.
Over the period from January to March, turnover reached 127.3 billion dollars, up 9% year on year and significantly above the 124.6 billion expected by analysts.
After initially welcoming the release in early post-close electronic trading, Wall Street eventually corrected the issue and put the stock under pressure. It was yielding more than 2% after gaining more than 10%.
The New York market raised Amazon’s second-quarter revenue forecast to a range of $127 billion to $133 billion, slightly better than analysts’ forecasts of $129.8 billion.
In the first quarter, revenue growth came from cloud computing, via the subsidiary Amazon Web Services (AWS), which saw its revenues increase by 16% year-on-year, excluding currency effects, even if this increase shows a slowdown.
From one quarter to another, the turnover of AWS even fell slightly (-0.1%).
“Clients continue to look for ways to optimize their cloud spending to weather the tough economic conditions,” Chief Financial Officer Brian Olsavsky said on the earnings conference call.
The executive revealed that remote computing experienced a growth rate in April that was 5 percentage points lower than in the first quarter, which was already decelerating.
Another highlight: the dynamism of advertising, whose revenues rose by 21%, a pace comparable to that of previous quarters.
“This stronger than expected performance of the two key profit centers of AWS and advertising indicates that the company may have raised the bar,” commented Andrew Lipsman, analyst at Insider Intelligence.
These figures compensate for the zero growth in online sales, which have been stalling for more than a year.
Monitor costs
Furthermore, “recent cost-cutting measures appear to be producing improvements in profitability,” noted Andrew Lipsman.
Amazon has notably decided to cut 27,000 jobs in total. At the end of March, the group’s workforce was 10% lower than in the same period last year, at 1.46 million employees.
“We are making progress in modifying our cost structure and bringing it back to its pre-pandemic levels”, described Brian Olsavsky, referring in particular to the redesign of the mesh of Amazon’s delivery services in order to optimize travel.
Margins remain under pressure, […] and we believe that as a result, Amazon will continue to prioritize efficiency and return on investment, and break with the old philosophy of getting into a multitude of different projects.
Neil Saunders, GlobalData Analyst
The company’s net profit reached 3.1 billion in the first quarter, against a net loss of 3.8 billion over the same period last year.
Reported per share, data scrutinized by the market, the profit is 31 cents, well above the 21 cents announced by analysts.
“For the first time in several quarters, Amazon finally seems to have some wind at its back,” according to Andrew Lipsman.
During the conference call, CEO Andy Jassy touted Amazon’s massive investment in artificial intelligence (AI), which has been on everyone’s lips since the launch of the ChatGPT interface in November.
“Language models [qui permettent de générer des contenus] require years to build and billions of dollars” of investment, argued the official. “And there will only be a handful of companies willing to invest that much time and money, Amazon being one of them. »
Andy Jassy also talked about AI about connected devices, which the group wants to use to create “the best personal assistant in the world”, a philosophy already embodied by the Alexa assistant. “I think there is a significant business model behind it. »