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.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS