Amazon reported better-than-expected revenue on Thursday, but the stock’s initial pop was wiped out after executives raised concerns of ongoing weakness in cloud growth.
Here are the key numbers:
- Earnings: 31 cents per share
- Revenue: $127.4 billion vs. $124.5 billion expected, according to analysts surveyed by Refinitiv
It’s not immediately clear if the reported earnings are comparable to the Refinitiv analyst estimate of 21 cents per share.
Here’s how other key Amazon segments did during the quarter:
- Amazon Web Services: $21.3 billion vs. $21.22 billion expected, according to StreetAccount
- Advertising: $9.5 billion vs. $9.1 billion expected, according to StreetAccount
Sales at AWS rose about 16% in the first quarter to $21.35 billion, above the $21.22 billion projected by Wall Street. Still, that marks a deceleration from the previous quarter, when AWS grew 20%.
Companies have been trimming their cloud spend in recent months amid a challenging economic environment, and finance chief Brian Olsavsky warned on the call after the report that clients keep tightening their belts.
“As expected, customers continue to evaluate ways to optimize their cloud spending in response to these tough economic conditions in the first quarter,” Olsavsky said. “We are seeing these optimizations continue into the second quarter with April revenue growth rates about 500 basis points lower than what we saw in Q1.”
The shares initially jumped as high as 10% after Amazon said revenue rose 9% from $116.4 billion a year earlier, topping estimates. Even with the revenue beat, Amazon remains mired in single-digit sales growth coming off its weakest year for expansion in its quarter-century as a public company.
The stock sold off during the earnings call and turned negative, falling almost 3% below its closing price.
Attendees walk through an expo hall during Amazon Web Services’ Reinvent conference at the Venetian in Las Vegas on Nov. 29, 2022.
Noah Berger | Getty Images Entertainment | Getty Images
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