In ‘stellar’ quarter, Amazon books 244 per cent surge in net income

Amazon has delivered a stunning 244 per cent growth in third-quarter net income as – in the words of one analyst – it overrides the slight slowdown impacting the wider US consumer economy.

The e-commerce giant booked a net income of US$9.9 billion during the third quarter of FY23, which GlobalData MD Neil Saunders attributes to efficiencies the management implemented, such as responding to concerns of overcapacity and the reorganisation of the fulfilment network to both reduce costs and improve services for customers.

“It is very easy to look on these things as obvious steps after they have been implemented, but the level of thinking and planning required to implement them is very high and is a testament to Amazon’s entrepreneurial zeal and spirit,” said Saunders.

“One of the factors that makes Amazon less susceptible to some of the challenges in the economy is that it has become a reliable and important partner to many in the consumer sector. When it becomes more difficult to reach customers and shoppers become a little more reticent to spend, many companies turn to Amazon and its various solutions from advertising to seller services.”

Amazon reported a 13 per cent increase in net sales to $143.1 billion, as sales grew 11 per cent to $87.9 billion in the North American segment and jumped 16 per cent to $32.1 billion in the international segment.

Its cloud service AWS reported an increase in sales of 12 per cent to $23.1 billion.

“We had a strong third quarter as our cost to serve and speed of delivery in our stores business took another step forward, our AWS growth continued to stabilise, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Andy Jassy, Amazon CEO.

For the fourth quarter, Amazon forecasts net sales of between $160 billion and $167 billion.

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