Amazon’s first quarter earnings exceeded expectations and caused the stock to rise up to 10% in after hours trading on Thursday. The company’s net sales of $127.36 billion exceeded the estimated $124.7 billion, and EPS of 31 cents was higher than the expected 20 cents. Amazon Web Services (AWS) net sales reached $21.35 billion, compared to the estimated $21.03 billion, and the operating margin was 3.7% versus the estimated 2.38%. The company’s Q2 net sales guidance of $127-133 billion was lower than the estimated $130.1 billion. Amazon CEO Andy Jassy credited the company’s teams for delivering for customers in an uncertain economy, and highlighted the improvement in the cost to serve in their fulfillment network, as well as the growth of their advertising business.
While Jassy cautioned on prospects for the company’s cloud business, he also linked AI with AWS’s long-term plans. The company’s efforts to reduce costs have resulted in laying off 27,000 employees in recent months. Notably, Amazon’s North America segment is operating at a profit of $898 million, compared to a loss of over $1.5 billion in the same quarter last year.
