Amazon had nothing but good news to report for the first quarter of 2024, with sales rising 13%, to $143.3 billion while operating income skyrocketed to $15.3 billion, from $4.8 billion in last year’s first quarter. The sales and earnings performance exceeded analysts’ expectations, and the company's stock rose about 5% in early morning trading today.
As usual, Amazon’s cloud computing unit, AWS, delivered more than half of the company’s operating profits, with earnings in the group up to $9.4 billion. Revenue at AWS grew 17%, to $25 billion. All of the company’s operating groups had increases in the quarter, with the slowest growth rates coming in its physical store business, where sales increased 6%, and its online store segment, where sales were up 7%. Online stores still remain Amazon’s largest revenue driver; its sales of $54.7 billion accounted for 38% of the company’s first quarter total revenue.
“It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results,” said Amazon president and CEO Andy Jassy, in a prepared statement. He pointed to the accelerating growth rate for AWS, expanded selection and faster delivery in its stores’ operations as among the highlights in the quarter.
Among the many first quarter achievements Amazon described in its press release were a number of AI-related items, including the continued rollout of Rufus in the Amazon Shopping app. Still in beta, Rufus is a generative AI–powered shopping assistant that can answer shopping-related questions, provide product comparisons, and make recommendations across Amazon's online stores.
To help its third-party sellers sell more items, including books, Amazon has also built an AI feature to let independent sellers in the U.S. create product listings, including a new tool that enhances and streamlines the process of creating product listings. The tool, Amazon noted, saves sellers time and effort “while also developing product listings that appeal to customers and help drive sales.”
Amazon expects the first-quarter sales momentum to slow somewhat in the current quarter, but still predicts that sales will increase by 7–11% over last year’s second period. And even if sales growth slows, Amazon still expects solid earnings improvement, with operating income forecast to be in the $10 to $14 billion range, compared to $7.7 billion a year ago.
