Amazon reported on Thursday higher fiscal third-quarter profit and sales compared with a year ago, as the retail behemoth kept attracting shoppers looking for good prices while inflation resurges.
The results beat Wall Street expectations. The company's prominent cloud computing arm also surpassed analysts' forecasts. But Amazon issued a cautious sales outlook for the fiscal fourth quarter, citing overall economic uncertainty and President Donald Trump's tariffs.
Shares, however, soared 11% in after-hours trading.
Analysts are analyzing Amazon's results to get insight into how shoppers are spending heading into the holiday season and how the online behemoth is managing cost increases from Trump's tariffs.
But Amazon, based in Seattle, is also under pressure to shore up confidence among investors that its computing arm Amazon Web Services (AWS) is just as powerful as Microsoft's Azure and Google’s Google Cloud Platform.
Amazon delivered better-than-expected 20% growth for AWS, following a 17.5% growth in the fiscal second quarter. Andy Jassy, president and CEO of Amazon, noted in a statement that AWS is growing at a pace it hasn't seen since 2022.
"We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business," said Jassy in a statement.
Jassy also noted that in stores, Amazon continues to realize the benefits of innovating in its fulfillment network, and it's on track to deliver to Prime members at the fastest speeds ever again this year, expand same-day delivery of perishable groceries to over 2,300 communities by end of year, and double the number of rural communities with access to Amazon’s same-day and next-day delivery.
Amazon is rapidly automating its warehouses, raising big questions on how many workers it will need in the future.
In fact, Amazon announced on Tuesday that it's cutting about 14,000 corporate jobs as it ramps up spending on artificial intelligence and cuts costs elsewhere. Teams and individuals impacted by the job cuts were notified on Tuesday. Amazon has about 350,000 corporate employees and a total workforce of about 1.56 million. The cuts amount to about a 4% reduction in its corporate workforce.
Late last month, Amazon unveiled a new robotics system – being tested in South Carolina – for its warehouses that coordinates multiple arms to perform picking, stowing, and consolidating tasks simultaneously. This technology effectively collapses three assembly lines into one, the company said.
Amazon is also testing an AI agent that helps human managers deploy workers and avoid bottlenecks. The system allows operators to spend less time analyzing dashboards and more time coaching teams, creating safer work environments, the company said.
Amazon's strategies seem to be powering its latest results.
Amazon posted net income of $21.12 billion, or $1.95 per share, for the quarter ended Sept. 30. That's up from $15.33 billion, or $1.43 per share, a year ago.
Analysts had expected $1.57 per share for the quarter, according to FactSet.
Amazon's sales rose to $180.2 billion, up from $158.88 billion in the year ago period.
Analysts had expected $177.91 billion, according to FactSet.
The company said it expects sales for the fiscal fourth quarter to be anywhere in the range of $206 billion to $213 billion. Analysts are expecting $208.41 billion, according to FactSet.
