Amazon saw its revenue increase during the second quarter by 11% to $134.2 billion with help from improved online retail sales, nearly doubling analysts’ quarterly estimates.
Amazon’s shares grew by roughly 10% in after-hours trading following the August 3 earnings report.
“With the better-than-expected profits in the U.S. retail division, the company is most likely seeing the operational inefficiencies that plagued the business over the past few quarters starting to abate,” said Brian Yarbrough, an analyst for the Edward Jones financial services firm. Amazon also offers cloud-based web services, Alexa and TV streaming.
The quarterly results highlight Amazon’s attempt to reduce costs through job cuts and reducing operations that have been in the red, according to The Wall Street Journal. Over the past 12 months, Amazon has laid off more than 27,000 employees. More jobs could be eliminated as the company rolls out a new policy requiring workers to relocate to major Amazon corporate hubs in places like Seattle or New York. Otherwise, they could face termination.
Even though Amazon is pleased with its progress, the organization sees more opportunities to improve cost efficiencies moving forward, said chief financial officer Brian Olsavsky.
Amazon expects its operating income for the third quarter of 2023 to be between $5.5 billion and $8.5 billion, a significant jump from $2.5 billion in Q3 2022. The company also estimates quarterly sales will be between $138 billion and $143 billion, suggesting at least 9% year-on-year growth.