Amazon Surprising Earnings Report: Amazon’s Thursday earnings report pleased investors. The company did even better than expected! It made 65 cents for each share, far more than expected. Amazon’s stock rose 9% after hours.
Amazon was amazing in February 2021; OMG! Their 2020 fourth-quarter earnings were $14.09 per share, above expectations. It looks shattered! After that win, there was an unexpected announcement: brilliant CEO Jeff Bezos was quitting.
After that, Andy Jassy became CEO and is working to shrink and open Amazon. The company stopped trying to grow, as Bezos generally did because sales were low and the economy was awful. In 2022, investors pressured Jassy to make significant decisions as the stock price dropped by half. He eliminated dangerous ventures in healthcare and food. Companies stopped hiring and slashed 27,000 jobs, which was alarming.
At Thursday’s money meeting, Jassy discussed methods to save money and improve delivery. Amazon split its network into eight regional networks. Their inventory improved. This reduced delivery time and cost.
Amazon’s North American unit made $3.21 billion in the quarter, which is surprising. This was a significant change from last year, when the section lost $627 million.
Jassy’s business approach has changed its dependence on Amazon Web Services (AWS), its most significant cloud business. AWS provided most of Amazon’s revenue. Change is coming. Amazon’s second-quarter revenue and profit ratio increased. AWS’s profit margin dropped from 29% last year to 24.2%.
Jassy is enthusiastic about AWS’s future and wants investors to rethink its growth pace. The cloud unit’s double-digit growth indicates that it is attracting new customers and workloads despite its $20 billion-plus quarterly revenues.
Amazon is optimistic about how AI will earn AWS money. Jassy thinks creative AI will make cloud services more attractive.
However, Amazon may need to invest more in its AI programs. As more people utilize it, AWS must invest in data centers and other tools. It will take time, but they will get that money back.
Jassy loves this challenge because it shows its consumers perform well on their platform. As it investigates creative AI, Amazon may need to pay more. However, this investment will help their clients succeed in growing their cloud business.