Total sales at Amazon increased 13%, to $143.1 billion, in the third quarter ended September 30, 2023, over the comparable period in 2022, and operating income soared to $11.2 billion, from $2.5 billion in the third quarter 2022. Following several shaky periods in which Amazon worked to rightsize its business after rapidly expanding to meet the online demands of Covid, this was the second consecutive quarter results exceeded analysts’ expectations.
The results closely followed the usual pattern, with Amazon’s cloud service business, AWS, generating the bulk of its profits—$7 billion of the $11.2 billion total—while sales in its two retail businesses, online and physical, posted the slowest growth among its groups, at 7% and 6% respectively. Online sales remain the company’s largest revenue engine by far, generating $57.3 billion in the quarter.
Amazon CEO Andy Jassy said that the decision to divide what was a single distribution network into eight regions is “exceeding [the company's] expectations.” He added that the change has “increased purchase frequency” and lowered costs for Amazon's online business.
The company’s third-party seller group had the largest sales gain in the quarter, with revenue up 20%, to $34.3 billion. The service is used by a host of different parties that fulfill book orders, and is one of the facets of Amazon’s business under fire from the antitrust lawsuit brought by the government earlier this fall.
The company’s forecast for fourth quarter results were met with mixed expectations by analysts, but still project sales growing 7%–12% compared with the fourth quarter last year. Operating income is expected to be between $7.0 billion and $11.0 billion, compared with $2.7 billion in last year's fourth quarter, which was a weak one by Amazon standards.
