Amazon is set to report its first-quarter earnings, with analysts forecasting earnings per share of 83 cents and revenue of $142.5 billion. Wall Street is closely monitoring key numbers such as Amazon Web Services revenue projected at $24.5 billion and advertising revenue at $11.7 billion.
Analysts are anticipating a revenue growth of 12% for Amazon, marking the fourth consecutive quarter of double-digit expansion and a slight increase from the previous year. Operating income is also expected to rise by over 130% from the previous year, reaching $11.2 billion.
Cost-Cutting and Profitable Services
Under CEO Andy Jassy, Amazon has shifted towards a more disciplined spending approach while focusing on growing profitable services like advertising, cloud computing, Prime memberships, and the third-party marketplace. The company’s strategic cost-cutting initiatives have led to significant growth in earnings.
Amazon has undergone significant employee layoffs in recent years, with a focus on streamlining operations in its health and AWS businesses. The company has also been emphasizing the expansion of high-margin ventures like advertising to drive revenue growth.
After a challenging period in 2021 and 2022, Amazon’s stock surged by 75% in the previous year and has continued to outperform the market in 2024. Analysts are bullish on the company’s growth prospects, expecting a 12% increase in AWS revenue and over 23% growth in advertising revenue for the first quarter.
Future Outlook and Investor Expectations
Analysts believe that Amazon’s advertising business has significant room for expansion, especially with the continued growth of off-platform advertising opportunities and the monetization of Prime Video ads. The company’s healthy financial position, with $73.4 billion in cash and equivalents, has raised speculation about the possibility of Amazon issuing its first-ever dividend.
Amazon’s first-quarter earnings report is highly anticipated by investors and analysts alike. With a focus on profitable services, cost-cutting measures, and potential dividend announcements, all eyes are on the tech giant’s performance in the upcoming release. Stay tuned for the conference call with investors at 5:30 p.m. ET to get a deeper insight into Amazon’s financial outlook for the rest of the year.
Leave a Reply