Published - August 4th, 2023 @ 10:08 AM (GMT+2)

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Amazon's Q2 Earnings & Forecasts Bright Q3 Revenue:
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Amazon.com Inc.(NASDAQ:AMZN) has once again proven its resilience in the market, with Q2 earnings showing a significant profit and sales jump and forecasting a bright Q3 on resilient cloud sales and shopping trends.

Sales grew 11% to $134.4 billion, an increase from $121.2 billion in the second quarter of 2022, exceeding analyst predictions of $131.4 billion in revenue. The stock surged nearly 10% in after-hours trading, and Amazon's stock has risen 52% year to date, one of a handful of tech stocks that have helped power the market higher this year.
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Net Income and Analyst Predictions:
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The company's profit jumped sharply compared to this quarter last year. Its net income was $6.7 billion in the second quarter, compared to a net loss of $2 billion in the second quarter of 2022. It soared past Refinitiv analyst predictions of $3.592 billion in earnings.

Investors were closely watching customer spending in both the cloud and retail markets. Amazon expects its third-quarter sales to grow between 9% and 13% compared to the previous year's quarter.

Amazon's Strategies & Innovations:
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Facing an array of challenges, Amazon has reorganised its fulfilment network and opened warehouses for same-day shipping closer to big metro areas, saving time and costs on delivery. Amazon's chief financial officer, Brian Olsavsky, said that faster speeds have meant Prime loyalty customers are "shopping more often."

Revenue Growth & Cloud Computing:
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For Q2, Amazon's revenue grew 11% to $134.4 billion, beating estimates of $131.5 billion from analysts by Refinitiv. Amazon's cloud-computing division has been key. In recent months, Amazon Web Services (AWS) saw its sales growth slow as wary businesses scrutinized their cloud bills. Olsavsky said such "cost optimization" continued, but big companies embraced the cloud anew, a lift to the division this spring and summer.
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Q3 Forecast and Long-term Goals:
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CEO Andy Jassy said, "Our AWS growth stabilized." Such investments, offset by lower fulfillment expenditures, are down from $59 billion in 2022. Amazon is now expecting a bump from its biggest sales day as part of last month's marketing blitz for loyalty shoppers known as Prime Day.

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The company forecasts current-quarter net sales from $138 billion to $143 billion. Analysts polled by Refinitiv were expecting revenue of $138.25 billion. Longer-term, Amazon aims to turn one unit, its $35 billion in yearly gross business-to-business e-commerce sales, into $100 billion, Jassy told analysts.

Cost Cuts & Staffing:
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Amazon has sought cost cuts, with 27,000 people affected by layoffs, or what had been 9% of its roughly 300,000-person staff. It recently revealed more reductions at Amazon Fresh stores while searching for months for the right grocery strategy.

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Conclusion

The company reported a quarterly profit of $6.7 billion, nearly double what analysts expected. With these numbers, Amazon remains the world's biggest cloud provider and online retailer, forecasting a bright future and robust growth.

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