(CTN News) – In after-hours trading Thursday, Amazon shares were up more than 7% after the Seattle-based company exceeded both revenue and profit expectations.
According to Amazon, its second quarter revenue increased by 11% year over year to $134.4 billion. The net income was $0.65 per share, or $6.7 billion.
Analysts expected revenue of $131.5 billion and earnings of 35 cents per share.
During the fourth quarter of 2013, operating income was $7.7 billion, up from $3.3 billion a year earlier and well above analyst expectations.
With thousands of layoffs and other pullbacks over the past year, Amazon appears to be reaping the benefits of its cost-cutting efforts.
According to Amazon CFO Brian Olsavsky on a conference call with reporters, changes to the company’s shipping fulfillment network have also resulted in lower costs.
According to Olsavsky, inflation headwinds are continuing to ease, notably in the fuel price and other transportation costs.
Amazon’s cloud computing business reported revenue of $22.1 billion, up 12% from the year-ago period, but down from a growth rate of 33% one year earlier, part of a trend of slowing growth in the market-leading public cloud platform.
In their earnings reports last week, Microsoft and Google both reported strong cloud results, primarily due to early interest in infrastructure and services for the development of generative AI applications for corporate customers.
AWS announced a series of generative AI announcements in New York last week, including new and updated large language models.
ThePrime Day took place after the quarter ended and is not reflected in this week’s report.
This year, Amazon’s stock has increased by over 50%.
Amazon’s second quarter financials are presented below.
A total of $52.9 billion was generated by online stores, an increase of 4% year-over-year.
Its cloud business grew 12% to $22.1 billion, with operating income of $5.3 billion, accounting for a majority of the company’s profits.
There was a 6% decline in AWS operating income in Q2 compared to Q2.
In Q1, Amazon reported revenue of $21.3 billion, an increase of 16% from the same period last year. In the year-ago quarter, AWS reported a 33% increase in revenue.
During the quarter, Amazon CEO Andy Jassy said, “Our AWS growth stabilized as customers began to shift from cost optimization to new workload deployment.”
Advertizing is one of Amazon’s higher-margin businesses, along with AWS. During the quarter, advertising generated $10.6 billion in revenue, an increase of 22% over the previous year.
In comparison, the growth rate in Q1 was 23%, while the growth rate in Q1 of last year was 21%.
Amazon has been expanding its services and products for third-party sellers in recent years. A total of $32.3 billion was generated by third-party seller services, an increase of 18%.
The third-party seller accounted for 60% of all units sold, a new record.