The Guardian (USA)

Amazon profits surge on strong trading season and cloud computing growth

- Callum Jones

Profits at Amazon have surged on strong seasonal trading and robust growth in its powerhouse cloud computing business.

The world’s largest retailer generated revenue of $170bn in the three months to December, up 14% on the same period of 2022, and clearing expectatio­ns on Wall Street of some $166bn.

Net income hit $10.6bn in the fourth quarter, from $278m a year previously, after the company moved to cut costs and draw a line under years of rapid expansion following the onset of the pandemic. Earnings per share hit $1.03.

Shares in the business rose 5.5% during out-of-hours trading in New York.

After Amazon, valued at $1.6tn on the stock market, cut 27,000 jobs last year, the layoffs have continued, albeit at a lesser pace, in recent weeks.

On Thursday Andy Jassy, the group’s chief executive, said: “This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon. While we made meaningful revenue, operating income and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvemen­ts across our businesses.”

Amazon has built a sprawling digital empire around its e-commerce platform, from smart speakers to sports broadcasti­ng. Through Amazon Web Services (AWS), it also leads the lucrative cloud computing market, though Microsoft, now worth $3tn, has eaten into its lead with more extensive integratio­ns of artificial intelligen­ce. The company announced it would integrate a shopping assistant, powered by AI and named Rufus, into its app prior to the earnings call. Jassy said on the earnings call that Amazon’s AI offerings are “really resonating with customers”, though revenue had yet to make a meaningful contributi­on to the company’s bottom line.

On Thursday, the company said it is launching an AI-powered shopping assistant named Rufus on its mobile app.

Regulators have sought to curb the vast conglomera­te’s growth: earlier this week, Amazon abandoned a planned $1.4bn acquisitio­n of the robot vacuum cleaner company iRobot amid European opposition to the deal. US regulators announced last week they would probe the company’s deals with fledgling AI companies like Anthropic.

Revenue at AWS increased 13% to $24.2bn in the fourth quarter. Amazon’s fast-growing advertisin­g business continues to “drive positive results”, Jassy noted: sales generated by the division climbed 27% to $14.7bn.

For the current quarter, which runs to March, Amazon forecast sales growth of up to 13%. Operating profits are also set to rise significan­tly, it estimated, from $4.8bn to between $8bn and $12bn.

 ?? Amazon's logistics centre in Boves, France, on 6 October 2021. Photograph: Pascal Rossignol/Reuters ??
Amazon's logistics centre in Boves, France, on 6 October 2021. Photograph: Pascal Rossignol/Reuters

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