Amazon.com Inc. gave a sales outlook that topped estimates on a strong performance from its main e-commerce business. The shares rose about 7% in extended trading.
Revenue in the current quarter will be $138 billion to $143 billion, compared with analysts’ average projection of $138.3 billion. Operating income will range from $5.5 billion to $8.5 billion. Analysts, on average, estimated $5.41 billion.
Since taking the reins two years ago, Chief Executive Officer Andy Jassy has been putting his stamp on the world’s largest e-commerce and cloud services company. Besides cutting thousands of jobs, he has axed dozens of products hatched during the go-go years of founder Jeff Bezos and initiated reviews of several other businesses.
Keen to retain a competitive edge in its core online retail business, Amazon has been investing heavily in its logistics operation and on Monday pledged to double the number of facilities capable of getting orders to customers the same day. Earlier this week, Bloomberg Businessweek reported that Amazon is rebooting its grocery operation by offering fresh food delivery to shoppers without Prime subscriptions and more tightly integrating its Fresh and Whole Foods Market chains.
Jassy showed investors he can boost sales while slowing the pace of spending. Second-quarter revenue increased 11% to $134.4 billion, the company said Thursday in a statement, topping estimates. Operating expenses increased 7.5% to $126.7 billion.
Sales in the online stores category increased 4% to $53 billion.
After cutting 27,000 mostly corporate jobs, Amazon employed 1.46 million people as of the end of the period on June 30, a decrease of 4% from the period a year earlier.
The shares hit a high of $139.20 in extended trading after closing at $128.91 in New York. The stock has gained 53% so far in 2023 as part of a broad technology industry rebound.
Amazon Web Services, which generates much of the company’s operating profit and is now slowing, has rolled out various products based on generative artificial intelligence. Some analysts believe Amazon has fallen behind Microsoft Corp. and Alphabet Inc.’s Google, which have released popular chatbots powered by the technology. Amazon denies this and says the generative AI race has barely begun.
AWS revenue rose 12% to $22.1 billion, which was more than Wall Street projected. But it was the sixth consecutive quarter that the pace of growth has declined in the cloud business.