Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.

David Paul Morris | Bloomberg | Getty Images

Amazon reported better-than-expected first-quarter earnings and revenue, led by growth in advertising and cloud computing. Shares rose in extended trading.

Here’s how the company fared:

  • Earnings per share: 98 cents vs. 83 cents expected by LSEG
  • Income: $143.3 billion vs. $142.5 billion expected by LSEG

Wall Street is also looking at these key numbers:

  • Amazon Web Services: $25 billion versus $24.5 billion in revenue, according to StreetAccount
  • advertisement: $11.8 billion on revenue of $11.7 billion, according to StreetAccount

For the second quarter, Amazon said it expects revenue of $144 billion to $149 billion, representing growth of 7 percent to 11 percent. Analysts had expected a 12% rise to $150.1 billion, according to LSEG.

Amazon expects a continued surge in second-quarter profitability, but at a more measured pace. The company said operating income would be $10 billion to $14 billion, up from $7.7 billion a year earlier.

Sales at AWS accelerated 17% in the first quarter to $25 billion, beating Wall Street’s forecast for sales growth of 12% to $24.5 billion. AWS’s growth has slowed in the past year as enterprises cut their cloud spending. But Amazon executives said they see a reduction in cost optimizations and spoke optimistically about how the rise of generative artificial intelligence could be a boon to its cloud business.

Operating income jumped more than 200% in the period to $15.3 billion, far outpacing revenue growth, the latest sign that the company’s cost-cutting measures and focus on efficiency are strengthening the bottom line. AWS accounted for 62% of total operating profit.

Amazon’s earnings growth was driven in part by widespread cost-cutting, adjustments in fulfillment operations and stabilization of cloud spending. CEO Andy Jassy has become more disciplined in spending while expanding profitable services such as advertising, cloud computing, Prime memberships and a third-party marketplace.

The company has cut more than 27,000 jobs since the end of 2022, with layoffs continuing into 2024. In the first quarter, Amazon laid off hundreds of employees in its healthcare and AWS businesses.

Amazon’s advertising unit saw sales jump 24% to $11.8 billion, slightly above consensus estimates. The company’s advertising business, which has grown faster than retail or cloud computing, has become an increasingly important profit driver for Amazon and has emerged as a major player in online advertising.

This market has generally started to grow again after a brutal 2022, when brands messed up on spending to keep up with inflation and rising interest rates. Meta, A click and Google Parent Alphabet all reported first-quarter results last week and showed better-than-expected revenue growth, driven mostly by improvements in their advertising businesses.

Third-party seller services revenue, which includes commissions collected by Amazon, fulfillment, shipping and other fees, continued to grow. Sales at the division rose 16% year over year to $34.5 billion.

This story is evolving. Check back for updates.

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