Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | Bloomberg | Getty Images
Amazon will report its first quarter results after the bell on Tuesday.
Here is what analysts expect according to LSEG:
- Earnings per share: 83 cents
- Income: $142.5 billion
Wall Street is also watching several other numbers from the report:
- Amazon Web Services: $24.5 billion in revenue, according to StreetAccount
- Advertisement: $11.7 billion in revenue, according to StreetAccount
Analysts expect Amazon to report revenue growth of 12%, which would mark a fourth straight quarter of double-digit expansion and a slight acceleration from the previous year.
Profits are growing much faster, thanks to across-the-board cost reductions, adjustments to Amazon’s fulfillment operations and stabilizing cloud spending. According to StreetAccount, operating profit of $11.2 billion is expected to be up more than 130% from the previous year.
Under CEO Andy Jassy, Amazon has become more disciplined in its spending, while expanding profitable services such as advertising, cloud computing, Prime subscriptions and its third-party marketplace.
The company has laid off more than 27,000 employees since late 2022, with reductions extending into 2024. During the first quarter, Amazon laid off hundreds of employees across its healthcare and AWS businesses.
After a tough 2021 and 2022, Amazon shares have soared 75% last year and have gained 19% year to date, outperforming the Nasdaq Composite, which is up about 6.5 %.
Analysts expect Amazon to report a 12% increase in AWS revenue. This is a slight deceleration from the previous quarter, where revenue increased 13%, but a notable increase from the first quarter of 2023, where sales increased only 9%.
Executives said in February that they expected growing demand for generative artificial intelligence technology to give AWS a boost. Jassy echoed this sentiment in his annual letter to shareholders released earlier this month.
Advertising, another high-margin business, will also be a key area to watch, with revenue expected to grow more than 23% year-over-year to $11.7 billion. Digital Advertising Peers Meta, Google And Instant all reported profits last week that beat analysts’ expectations.
Wedbush analysts expect strong growth in Amazon’s advertising business in the first quarter and “healthy spending intentions for the remainder of 2024,” they wrote in a note to clients last week.
“We believe the opportunity for Amazon is still early and expect multi-year growth to exceed that of the broader digital advertising market, supported by the continued expansion of off-platform advertising opportunities, continued ad monetization Prime Video, emerging non-endemic advertiser demand and core advertising “Platform-sponsored product growth, supported by the secular shift to e-commerce,” Wedbush analysts wrote. compared to Amazon shares.
Wall Street will also be watching to see if Amazon takes a cue from its tech sector peers in announcing its first-ever dividend. Google parent Alphabet released its first dividend alongside its quarterly results last week, while Meta authorized its first-ever dividend in February.
Amazon ended 2023 with $73.4 billion in cash and equivalents.
The company will discuss the results in an investor conference call at 5:30 p.m. ET.
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