The world’s largest online retailer, Amazon, significantly increased sales in the second quarter despite high inflation and fears of a recession.
Revenues increased by seven percent year-on-year to $121.2 billion (119 billion euros), as the group announced on Thursday after the US stock market closed. Although operating profit fell from $7.7 billion to $3.3 billion, it exceeded experts’ expectations.
Even though the online shopping boom fueled by the pandemic has come to an end, Amazon’s subscription services increased sales by ten percent to $8.7 billion. Despite price hikes, Amazon has managed to attract new customers to its Prime service with free shipping and streaming services, who typically spend significantly more money on the e-commerce platform than other users.
The quarterly report was well received on the financial market, and the share rose by more than twelve percent at times after trading. Investors were particularly pleased with the business outlook for the current quarter. Amazon forecast sales growth of up to 17 percent to $125 billion to $130 billion. Analysts had expected an average of $127 billion.
On balance, Amazon posted a net loss of $2.0 billion for the three months ended June. But the reason was that a stake in the electric car manufacturer Rivian
was devalued by $3.9 billion. The company has come under heavy pressure on the stock market in the general downtrend in tech stocks and had already caused Amazon a $7.6 billion balance sheet write-down and red figures in the previous quarter.
Despite persistent inflationary pressures in gas, energy and transportation, Amazon is making progress in controlling costs, CEO Andy Jassy said. In particular, productivity in the warehouse and delivery network has been improved. Ultimately, operating expenses climbed by around twelve percent to $ 117.9 billion compared to the previous year. Although the increase was higher than in sales, it was lower than feared by financial experts.
The cloud business with storage space and applications on the Internet, which is extremely important for Amazon because of its high profit margins, continued to thrive. The flagship Amazon Web Services increased revenue by almost a third to $19.7 billion. The cloud platform’s operating profit increased by around 32 percent to $5.7 billion. Amazon’s increasingly important online advertising business increased revenues by 18 percent to $8.8 billion. (dpa)