Amazon.com has reported its strongest quarterly profit in a year and a half with revenues rising 11%, their shares climbed 6.8% on the news.
Prime Day delivered record transactions with over 300 million items purchased at more than 100,00 items a minute during the Amazon Sale event.
Operating income increased to $7.7 billion in the second quarter, compared with $3.3 billion in second quarter 2022.
Their International operating loss was reduced $0.9 billion, compared with an operating loss of $1.8 billion in second quarter 2022, it’s not known how much Australia contributed to the recovery.
Profit came in at $6.75 billion for the three months through June, reversing a loss a year earlier and close to twice the amount analysts were expecting.
The US Company is generating an increasing share of revenue from the more profitable business of providing services and advertising to independent merchants, who rent space on Amazon’s website and in its warehouses.
Advertising sales rose 22% to $10.7 billion and seller services revenue jumped 18% to $32.3 billion in the quarter.
Sales growth in Amazon Web Services, the cloud-computing division that accounts for the bulk of the company’s profit, continued to slow after hitting its weakest pace on record in the first quarter of the year.
Amazon’s stock has had a rocky ride after hitting all-time high in 2021 the stock plunged 50% late in 2022 as the business announced major restructuring of their operation.
The Wall Street Journal claims that Amazon’s business has been whipsawed in recent years as sales boomed during the pandemic, when much of work and life shifted online, then slowed afterward as more normal patterns of shopping and business spending resumed. In the spring of last year, Amazon was still adjusting to that newer reality, which led to a $2 billion loss for the second quarter of 2022.
Amazon has attributed its strong quarter to fast delivery speeds.
The Companies ad business jumped 22% to $10.7 billion, a positive sign for the digital ad market.
Since taking the reins two years ago, Chief Executive Officer Andy Jassy has moved to restructure the business.
Besides cutting thousands of jobs, he reined in spending while continuing to invest in Amazon’s core businesses. The company’s quarterly expenses increased at the slowest rate since at least 2012.
“The upturn in Amazon’s e-commerce business is an encouraging sign for the back half of the year that should add to topline growth,” Andrew Lipsman, an analyst at Insider Intelligence, said after the results.