Beats Expectations! Amazon’s Q3 Revenue $143.1 Billion, Net Profit Soars 241%!

YCD News – On October 26th, Amazon released its third quarter 2023 financial results. With inflation easing and business and consumer spending increasing, Amazon’s revenue and profit exceeded market expectations.

The financial results showed that Amazon’s net sales increased 13% year-over-year to $143.1 billion in the third quarter of 2023, beating analysts’ expectations of $141.5 billion. Sales in the North American business increased 11% year-over-year to $87.9 billion, sales in the international division increased 16% year-over-year to $32.1 billion, and sales in the AWS division increased 12% year-over-year to $23.1 billion.

Amazon’s net income also exceeded analysts’ expectations, coming in at $9.9 billion, up 241 percent compared to Q3 2022 ($2.9 billion), and diluted earnings per share of $0.94, up 236 percent compared to Q3 2022 ($0.28).

The faster earnings growth in the third quarter was driven by 1. pre-tax valuation earnings of $1.2 billion on Amazon’s investment in the common stock of electric vehicle maker Rivian Automotive; and 2. a variety of cost-cutting measures taken by Amazon over the past year, including two rounds of layoffs and continued reductions in transportation costs across its logistics network.

In digital advertising, Amazon continues to perform well as third-party sellers and big brands ramp up ad spending to increase visibility in an increasingly competitive marketplace. Amazon’s ad revenue grew 26% year-over-year to $12 billion in the third quarter.

Andy Jassy, Amazon’s CEO, said, “In the third quarter, we continued to see steady AWS growth, strong advertising revenue growth, and significant growth in overall operating profit and free cash flow. Strong business performance means another step forward for our retail business in terms of cost of service and speed of delivery.”

He also noted that dividing the U.S. logistics network into eight separate regions puts Amazon on track to offer Prime customers the fastest delivery speeds in 29 years this holiday season.

As we enter the fourth quarter, Amazon is gearing up for the Black Friday online sale. In response to the holiday package surge, Amazon announced last month that it would be hiring 250,000 seasonal employees in the U.S., a number that is 67 percent more than the number of employees it will hire in 2022 and 2021.

The e-commerce giant also said it will invest $1.3 billion this year in increasing wages for customer service and shipping employees, bringing the average wage for those positions to more than $20.50 per hour (an increase of more than 50 percent or more over five years).

Looking ahead, Amazon expects fourth-quarter net sales to be between $160 billion and $167 billion, an increase of 7% to 12% from the fourth quarter of 2022, compared to analysts’ average estimate of $166.6 billion; the company also expects fourth-quarter operating profit is expected to be between $7 billion and $11 billion, compared to $2.7 billion in the fourth quarter of 2022 and analysts’ average estimate of $8.71 billion.

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