Amazon: Third Quarter Sales Jump 13%; Net Income Triples to Nearly $10 Billion
Net sales at Amazon in the third quarter ended September 30 rose 13%, to $143.1 billion, and net income more than tripled, to $9.9 billion. Operating income overall jumped more than fourfold, to $11.2 billion. North American sales rose 11%, to $87.9 million, and North American operating income was $4.3 billion, compared to an operating loss of $400 million in the same quarter in 2022. International sales rose 16%, to $32.1 billion (without favorable currency exchange rates, international sales were up 11%), and the international operating loss was $100 million, compared to an operating loss of $2.5 billion in the same period a year earlier. Sales in AWS, Amazon's cloud division, rose 12%, and its operating income was almost $7 billion, and the company said AI will be a major element in its growth in the future.
Sales and income were above analysts' estimates, leading to a jump in Amazon's share price of more than 5%, to about $123, after the market closed yesterday.
Amazon CEO Andy Jassy commented in part: "We had a strong third quarter as our cost to serve and speed of delivery in our stores business took another step forward, our AWS growth continued to stabilize, our advertising revenue grew robustly, and overall operating income and free cash flow rose significantly. The benefits of moving from a single national fulfillment network in the U.S. to eight distinct regions are exceeding our optimistic expectations, and perhaps most importantly, putting us on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history. The AWS team continues to innovate and deliver at a rapid clip, particularly in generative AI."
The Wall Street Journal noted, "Amazon has been trying to engineer a rebound in its core e-commerce business following a slowdown after pandemic-induced heights. The company has reined in costs across its North America business, slashing roughly 27,000 corporate jobs and streamlining its operations following a cost-cutting review.... It has also said it saved costs through an overhaul of its delivery operations meant to place packages closer to customers."
Andrew Lipsman, an e-commerce researcher at Insider Intelligence, told the Journal, "Amazon has gone through a slog of tough quarters, a lot which were driven by headwinds as a result of inflation, and that has eased."
Amazon noted that it will hire "250,000 full-time, part-time, and seasonal employees in the U.S. this holiday season," and its "new average hourly wage for customer fulfillment and delivery roles" is more than $20.50 per hour.
Amazon predicted that net sales in the fourth quarter should grow 7%-12%, to between $160 billion and $167 billion. Operating income should be between $7 billion and $11 billion, compared to $2.7 billion in the fourth quarter last year.