Q1 results beat expectations across the board

Amazon (AMZN) reported first quarter earnings on Thursday that beat expectations and sent shares soaring in after hours trading.

Amazon stock popped as much as 10% late Thursday as investors digested revenues, profits, margins, and current quarter guidance that all beat Wall Street expectations.

“There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,” Amazon CEO Andy Jassy said in a statement.

The company’s efforts to rein in costs, which cost Amazon about $500 million in the first quarter, are expected to be a central focus on the company’s earnings call Thursday evening. The company has announced plans to lay off a total of 27,000 employees over the last few months.

Here are the most important numbers from Amazon’s report, compared to analysts’ estimates compiled by Bloomberg:

• Net sales: $127.36 actual versus $124.7 billion estimated

• EPS: 31 cents actual versus 20 cents estimated

• Amazon Web Services (AWS) net sales: $21.35 billion actual versus $21.03 billion estimated

• Operating margin: 3.7% actual versus 2.38% estimated

• Q2 net sales guidance: $127-133 billion actual versus $130.1 billion estimated

“Our Stores business is continuing to improve the cost to serve in our fulfillment network while increasing the speed with which we get products into the hands of customers (we expect to have our fastest Prime delivery speeds ever in 2023),” Jassy said.

“Our Advertising business continues to deliver robust growth, largely due to our ongoing machine learning investments that help customers see relevant information when they engage with us, which in turn delivers unusually strong results for brands.”

While the company’s AWS results this quarter will be a relief for Amazon investors, Jassy cautioned on prospects for the company’s cloud business. He also linked AI with AWS’s long-term plans.

“While our AWS business navigates companies spending more cautiously in this macro environment, we continue to prioritize building long-term customer relationships both by helping customers save money and enabling them to more easily leverage technologies like Large Language Models and Generative AI,” Jassy said. “We like the fundamentals we’re seeing in AWS, and believe there’s much growth ahead.”

Story continues

If there’s one big bottom line here it’s this: Amazon is growing again.

In North America, the company’s gone back to making money: This time last year, the segment was operating at a loss of more than $1.5 billion in the three months leading up to March 31, 2022. This year, this segment reported operating income of $898 million.

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.

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