Amazon is back in the black to start the year. CNN Business reported on Friday that the e-commerce giant announced on Thursday a profit of USD 3.2 billion for the first quarter, greatly above analysts’ estimates.
The Seattle-headquartered firm reported a loss of USD 3.8 billion in the year-ago quarter.
The shift to a profit aligns with Amazon’s recent escalation of cost-cutting measures. According to CNN Business, the company has announced two waves of layoffs, eliminated products, and nixed physical store expansions.
Additionally, it comes as certain aspects of Amazon’s business continue to expand despite ongoing recession fears that could impact business and consumer spending.
Revenue for the business went up 9% from the same period last year. According to CNN Business, Amazon expects second-quarter net sales to increase by 5% and 10% from last year, or between USD 127 billion and USD 133 billion.
“The results indicate 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.”
Another positive sign for its overall business is that Amazon Web Services, which has traditionally been a source of profit for the company, had double-digit percentage growth during the quarter.
AWS segment sales rose 16 per cent from the year before to USD 21.4 billion, CNN Business said, adding, “That comes after sales growth slowed in the previous quarter, as cloud customers tightened their purse strings due to uncertainty about the economy’s health.”
“While our AWS business navigates companies spending more cautiously in this macro environment, we continue to prioritise building long-term customer relationships,” Chief Executive Officer Andy Jassy said in a statement accompanying the earnings release.