Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | Bloomberg | Getty Images
Amazon will report first-quarter earnings after the bell on Tuesday.
Here’s what analysts are expecting according to LSEG:
- Earnings per share: 83 cents
- Revenue: $142.5 billion
Wall Street is also watching several other numbers in the report:
- Amazon Web Services: $24.5 billion in revenue, according to StreetAccount
- Advertising: $11.7 billion in revenue, according to StreetAccount
Analysts are expecting Amazon to report revenue growth of 12%, which would mark a fourth straight quarter of expansion in the low double digits and a slight acceleration from a year earlier.
Earnings are growing much faster, thanks to widespread cost-cutting, tweaks to Amazon’s fulfillment operations and the stabilizing of cloud spending. Operating income of $11.2 billion is expected, according to StreetAccount, up over 130% from a year earlier.
Under CEO Andy Jassy, Amazon has become more disciplined in its spending, while growing profitable services like advertising, cloud computing, Prime memberships and its third-party marketplace.
The company has laid off more than 27,000 employees since late 2022, with the cuts bleeding into 2024. During the first quarter, Amazon let go hundreds of staffers in its health and AWS businesses.
Following a rough 2021 and 2022, Amazon shares soared 75% last year, and have gained 19% year to date, outperforming the Nasdaq Composite, which is up about 6.5%.
Analysts expect Amazon to report a 12% increase in AWS revenue. That’s a slight deceleration from the previous quarter, when revenue grew 13%, but a notable uptick from the first quarter of 2023, when sales expanded just 9%.
Executives said in February they expect increasing demand for generative artificial intelligence technology to give AWS a boost. Jassy echoed that sentiment in his annual letter to shareholders released earlier this month.
Advertising, another high-margin business, will also be a key area to watch, with revenue projected to grow more than 23% year over year to $11.7 billion. Digital ad peers Meta, Google and Snap all reported earnings last week that surpassed analysts expectations.
Wedbush analysts expect to see strong growth in Amazon’s ad business in the first quarter, and “healthy spending intent for the remainder of 2024,” they wrote in a note to clients last week.
“We think the opportunity for Amazon is still early and expect multiyear growth above the broader digital ad market, supported by continued expansion of off-platform advertising opportunities, ongoing monetization of Prime Video ads, emerging demand from non-endemic advertisers, and core on-platform sponsored product growth supported by the secular transition to e-commerce,” Wedbush analysts wrote. They have an outperform rating on Amazon’s shares.
Wall Street will also be watching to see if Amazon takes a page from its tech peers in announcing its first-ever dividend. Google parent Alphabet last week issued its first dividend alongside its quarterly results, while Meta authorized its first-ever dividend in February.
Amazon ended 2023 with $73.4 billion in cash and equivalents.
The company will discuss the results on a conference call with investors at 5:30 p.m. ET.
