SEATTLE – Amazon.com reported strong results that showed a company humming on all cylinders, a testament to its efforts to cut and reallocate costs and put the cloud computing and e-commerce giant on sounder footing.
The Amazon Web Services cloud division, which suffered record low sales growth in 2023, continued to regain momentum during the third quarter. The online retail operation, which sputtered coming out of the pandemic, grew unit sales by double digits. So did revenue at Amazon’s fast-growing advertising business.
Total third-quarter revenue increased 11 per cent to US$158.9 billion (S$210 billion), the company said on Oct 31 in a statement, exceeding estimates. Operating profit was US$17.4 billion, demolishing the average estimate of US$14.7 billion.
“Amazon beat expectations in Q3 on the strength of the three pillars of its business: e-commerce, advertising and cloud services,” said Sky Canaves, an analyst at Emarketer.
Amazon shares rose about 5 per cent in extended trading on Oct 31. The stock has increased 23 per cent in 2024.
The results show the fruits of chief executive Andy Jassy’s years-long push to cut costs and streamline Amazon’s logistics operation. That has given him room to spend heavily on the new data centres required for the boom in demand for artificial intelligence services.
Speaking to analysts on a conference call after the results, chief financial officer Brian Olsavsky said Amazon expects to devote a whopping US$75 billion to capital expenditures in 2024, the majority of which will go toward technology infrastructure. Mr Jassy said he expected the company to spend even more next year.
Cloud unit revenue jumped 19 per cent to US$27.5 billion in the third quarter, in line with estimates. Operating income generated by the unit was US$10.4 billion, exceeding analysts’ average projection of US$9.12 billion.
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