Amazon Shares Rose More Than 6% After First-First-Quarter Profit Beat Estimates.

E-commerce giant Amazon (AMZN) beat analysts' profit estimates for the first quarter, with higher earnings from North American sales.

Key TakeAways 

• Earnings per share of $0.31 easily beat expectations of $0.22.

• North American e-commerce driven revenue, while global sales struggled on FX rates.

• AWS cloud demand was strong with 16% sales growth for the year. {alertSuccess}

Shares of the company soared more than 6.6% after announcing a strong beat on earnings with net income of $3.2 billion, or 31 cents per diluted share, compared to a net loss of $3.8 billion, or $0.38 per diluted share, a year earlier. increased. That was much stronger than analysts' forecasts of $2.39 billion, or 22 cents per share.

Amazon was expected to disappoint with a slowdown in its AWS cloud services and operating income for the segment was $5.1 billion versus $6.5 billion in the same period a year earlier, despite 16% sales growth.

Amazon reported a 9% increase in net sales to $127.4 billion, driven by an 11% increase in North American e-commerce sales to $76.9 billion. This helped offset disappointing international sales, which due to an 8% decline at unfavorable foreign exchange rates could only yield a profit of 1% for the company. Operating cash flow also increased 38% to $54.3 billion, compared to $39.3 billion for the trailing twelve months ended March.

Management pleased investors with a sales forecast of between $127 and $133 billion for the second quarter, which was largely in line with expectations. Despite strong operating performance, Amazon announced yesterday that it is shutting down its Hello Health service while cutting jobs. This will add to the 18,000 jobs cut in January and 9,000 cuts since last month.

Amazon was the latest big tech company to announce a major pivot toward artificial intelligence at the beginning of the month with AI language models available for the AWS platform. Known as Amazon Bedrock, the product lets customers promote their software with AI systems in a similar way to OpenAI's ChatGPT chatbot.