Amazon reversed its winter slide and posted strong financial results for the first quarter.
Revenue increased 9 percent from a year earlier to $127.4 billion, while net income jumped to 31 cents a share against a loss of 38 cents in 2022, the company said Thursday. Both numbers were better than analysts had expected.
“There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,” Andy Jassy, Amazon’s chief executive officer, said in a statement.
Investors celebrated by pushing the stock up 10 percent in after-hours trading. Analysts had expected a profit of 21 cents a share and revenue of $124.55 billion.
Amazon, like other tech companies, did very well early in the pandemic when everyone stayed home but has had some troubles since. After expanding its retail distribution network to handle an influx of new business that did not stick around, management is paring back.
Since November, the company has confirmed 27,000 layoffs. Mr. Jassy, who replaced Jeff Bezos as chief executive in the summer of 2021, has been aggressively cutting costs while stressing Amazon’s long-term commitment to investing in new ideas.
Amazon shares rose 4 percent on Thursday before the market closed, continuing a recent bounce. But the stock was down more than a third from its pandemic peak, a problem at a company where stock grants make up a significant part of employees’ pay.
Expectations for Amazon before it reported were low. In the previous quarter, which included the all-important holiday season, overall revenue was up a mere 9 percent from a year earlier. That was about half of what Amazon shareholders are used to. As for profit, it nearly vaporized in the October-to-December quarter.
Amazon’s Big Tech peers reported surprisingly good results this week after a brutal winter of layoffs, weak results and diminished expectations. Facebook’s parent, Meta, snapped a three-quarter losing streak in revenue, sending its shares up 10 percent. Google’s advertising search business did better than expected, while Microsoft’s cloud computing operation helped the company notch impressive results.
For years, even decades, Amazon chose growth over profits. Making money took a back seat to establishing new markets. Sometimes this worked so well it changed the fundamental nature of the company. The Amazon Web Services division was a pioneer in data storage, growing at such a torrid rate that its profits have done much to compensate for Amazon’s anemic returns on the retail side.
On the other hand, many small ventures remained small. When to shut them down is a decision that for years Amazon could put off but no longer. Rising interest rates and balky consumers forced its hand.
This week, the company shut its Halo line of health and fitness devices. Amazon has major ambitions in health care, but fitness devices are a crowded market and Halo was not breaking through. Amazon also shut down in recent days Book Depository, an online bookseller it bought in 2011 and operated independently from its principal book-selling division.
Mr. Jassy stressed this month in his annual letter to shareholders that change was good. “I’m optimistic about our future prospects because I like the way our team is responding to the changes we see in front of us,” he wrote.