Yahoo Finance Amazon.com Inc (AMZN) Surpasses Analyst Revenue Forecasts with Strong Q1 Performance
Net Sales: Reached $143.3 billion, up 13% year-over-year, surpassing estimates of $142.473 billion.
Net Income: Increased to $10.4 billion, significantly exceeding estimates of $8.668 billion.
Earnings Per Share: Reported at $0.98 per diluted share, beating the estimated $0.83 per share.
Operating Income: Grew to $15.3 billion from $4.8 billion in the previous year, indicating strong operational efficiency.
AWS Segment Sales: Rose by 17% to $25.0 billion, highlighting robust growth in cloud services.
Free Cash Flow: Improved dramatically to an inflow of $50.1 billion for the trailing twelve months, reversing from an outflow of $3.3 billion in the prior period.
International Segment Operating Income: Turned positive at $0.9 billion, compared to a loss of $1.2 billion last year, showing significant international market improvement.
On April 30, 2024, Amazon.com Inc (NASDAQ:AMZN) disclosed its financial outcomes for the first quarter ending March 31, 2024, through its 8-K filing. The company reported a significant 13% increase in net sales to $143.3 billion from $127.4 billion in the same period last year, exceeding the estimated revenue of $142.473 billion. Earnings per share (EPS) also outperformed expectations at $0.98, compared to the forecasted $0.83.
Company Overview
Amazon, a leading force in the online retail space, continues to dominate with a diverse portfolio that includes e-commerce, Amazon Web Services (AWS), and digital streaming among others. In 2021, the company reported net sales of approximately $386 billion, with retail-related revenue accounting for about 80% of the total. AWS contributes 10%-15%, followed by advertising services at around 5%. Amazon's international operations, particularly strong in Germany, the UK, and Japan, make up 25%-30% of its non-AWS sales.
Financial Performance Insights
The first quarter of 2024 was marked by substantial growth across Amazon's segments. North America segment sales saw a 12% increase to $86.3 billion, while AWS segment sales jumped by 17% to $25.0 billion. The international segment also showed resilience with a 10% growth. Notably, operating income surged to $15.3 billion, a significant rise from $4.8 billion in the first quarter of 2023.
Net income demonstrated a robust increase to $10.4 billion, or $0.98 per diluted share, from $3.2 billion, or $0.31 per diluted share, in the prior-year quarter. This growth includes a pre-tax valuation loss of $2.0 billion from the investment in Rivian Automotive, Inc., highlighting the volatile nature of investment returns.
Cash Flow and Capital Management
Amazon's operating cash flow showed an impressive 82% increase to $99.1 billion for the trailing twelve months. Free cash flow significantly improved to an inflow of $50.1 billion, compared with an outflow of $3.3 billion in the previous period. These figures reflect Amazon's effective capital management and operational efficiency.
Strategic Developments and Future Outlook
Under the leadership of CEO Andy Jassy, Amazon continues to innovate and expand across its business segments. The company has notably enhanced its infrastructure and customer service capabilities, contributing to AWS's reaccelerated growth rate. Looking ahead to the second quarter of 2024, Amazon expects net sales to be between $144.0 billion and $149.0 billion, projecting a growth rate of 7% to 11% compared to the second quarter of 2023.
Amazon's strategic investments, particularly in AWS and its advertising ventures, are set to reinforce its market position and stimulate further growth. Despite challenges such as foreign exchange impacts and global economic uncertainties, Amazon's diverse portfolio and innovative capabilities position it well for sustained long-term growth.
For detailed financial figures and future projections, interested readers can access the full earnings report and supplementary data through Amazon's investor relations website.
Explore the complete 8-K earnings release (here) from Amazon.com Inc for further details.
This article first appeared on GuruFocus.
