Amazon will report its third-quarter earnings after the US markets close on 26 October, which will be the morning of 27 in the Asia-Pacific time zone. Amazon’s shares sharply retreated from the year-high amid a broad selloff in the US tech stocks. Its plan of increasing hiring and wages added to the downside pressure. Its shares stabilized recently on the tech comeback in October. While Amazon’s AWS remains focused on its bottom line growth, its online sales are expected to benefit from the Prime Day promotion, and the ad revenue saw strong momentum in the past year.
Q2 Earnings Review
Amazon blew away earnings expectations in the second quarter as all the key segments, including online sales, ad revenue, and AWS, topped Wall Street’s estimates amid the company’s cost-cutting measures. Amazon returned a double-digit revenue growth, up 11% year on year, since the fourth quarter of 2020. Its earnings per share came to $0.65, the highest since the fourth quarter of 2021. Its advertising revenue jumped 22% from a year ago, but the most profitable segment, AWS’ revenue, was up 12% year on year at the slowest pace since 2015. CEO Andy Jassy said, “Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment,” The overall strong performance was primarily due to a massive job cut of 27,000, or a 4% year-over-year drop in headcounts. The company also froze hiring to trim expenses. The company’s guidance for the third quarter is between $138 billion and $143 billion, or a growth of between 9% and 13%.
Business Growing Focus – the third-party sales service, AWS revenue
Q3 Forecast by Bloomberg
Revenue: $141.53 billion, + 11% year on year
Earnings Per Share, adjusted: $0.85 +16% year on year
Online Stores Revenue: $56.84 billion, +6% year on year
Advertising Services: $11.59 billion, +21% year on year
Amazon Web Services (AWS): $23.13 billion, +13% year on year
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