Amazon.com Inc posted higher first-quarter profit and sales that beat analysts' projections, underscoring the online behemoth's hold on shoppers looking for low prices and a wide selection in an uncertain economy.
The Seattle-based company also reported strong sales growth for its prominent cloud computing arm Amazon Web Services (AWS), it said after the market closed on Thursday.
However, uncertainty about US President Donald Trump's tariffs and consumer spending clouded Amazon's outlook.
Photo: Brendan McDermid, Reuters
Amazon, along with many large retailers and suppliers, have tried to beat the clock by bringing in foreign goods before Trump’s tariffs took effect.
Amazon president and CEO Andy Jassy told analysts during its earnings call that many of its third-party sellers did the same. And because of that move, a fair amount of third-party sellers haven’t changed their pricing yet, he said.
Jassy vowed that Amazon would do everything it could to keep prices low, and while he acknowledged challenges ahead, he touted Amazon's model of vast selection that would help it navigate this new climate.
“When there are uncertain environments, customers tend to choose the provider they trust most,” Jassy told analysts. “Given our really broad selection, low pricing, and speedy delivery, we have emerged from these uncertain eras with more relative market segment share than we started, and better set up for the future.”
Trump is also ending a trade exemption that allowed low-value shipments from China to bypass duties, an exemption that had given an advantage to China-founded e-commerce firms, such as Shein (希音) and Temu.
The new tariffs could benefit Amazon by increasing costs for its competitors. But it would also affect Chinese sellers who connect with American consumers on the company’s shopping platform. Furthermore, it could increase prices on a recently-launched online storefront that Amazon set up to ship low-cost products directly from China. The storefront, called Amazon Haul, was Amazon’s answer to Shein and Temu.
Amazon said that it earned US$17.13 billion, or US$1.59 per share, for the quarter ended March 31. That's up from US$10.43 billion, or US$0.98 a share, in the year-ago period.
Revenue rose 9 percent to US$155.7 billion from US$143.3 billion in the year-ago period.
Sales for AWS rose 17 percent to US$29.3 billion during the fiscal first quarter.
Amazon is one of the biggest players in the race around generative artificial intelligence (AI). Like other tech companies, it has increased investments in the technology and is spending billions to expand data centers that bolster AI and cloud computing.
The company is also investing in its own computer chips and those developed by Nvidia Corp. It has also expanded its own AI models and integrated generative AI into other parts of its business.
In the first quarter, Amazon reported spending US$25.02 billion on property and equipment, higher than the US$14.92 billion spent in the same period last year.
The company said it expects sales in the second quarter to be anywhere from US$159 billion to US$164 billion. Analysts projected US$161.2 billion, according to FactSet.
It also projects operating income to be in the range of US$13 billion to US$17.5 billion for the fiscal second quarter. Analysts expect US$17.6 billion, according to FactSet.
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