Amazon Inc. posted quarterly sales and profit on Thursday that were ahead of estimates, expressing confidence in its cloud business despite a slowdown in consumer spending and highlighting how its ambitious cost-cutting measures were beginning to bear fruit.
In extended trading, shares increased 8%, helped in part by an estimate for second-quarter results that will be approximately in line with investors’ expectations.
In an effort to allay persistent economic concerns, CEO Andy Jassy has sought to reduce spending across Amazon’s wide range of businesses.
He announced last month that Amazon would eliminate more positions, this time from its long-profitable cloud and advertising sectors, bringing the total number of layoffs since November to 27,000, or 9% of its over 300,000-person corporate workforce. The number of full- and part-time employees in the recently ended first quarter decreased 10% from a year earlier to around 1.47 million, due in part to attrition in the warehouse workforce.
Amazon has also discontinued entire services, most recently announcing on Wednesday that it would discontinue its line of Halo fitness trackers and issue refunds for recent purchases.
In addition to other difficulties, it is also looking for new sources of income in the face of inflation that is hurting European retail demand. After it signed a deal to buy provider One Medical in February, it began marketing discounted membership for primary care services in addition to higher food delivery fees for U.S. Prime loyalty members.
The largest online retailer in the world announced better-than-anticipated net sales of $127.36 billion over the first three months of the year and anticipated second-quarter sales between $127 billion and $133 billion.
Sales of $129.83 billion were predicted by analysts for the six-month period ending on June 30.
Long a significant source of profit, Amazon Web Services’ growth slowed to 15.8% in the first quarter, while businesses afraid of the recession have curbed their expenditure.
In comparison to a deficit of $3.84 billion a year earlier, net income for the three months ending March 31 was $3.17 billion.
In addition to a $50 billion boost during Thursday’s regular trading session, Amazon’s stock market worth increased by $125 billion as a result of the jump in its shares following its findings after the bell.