Amazon has grown incredibly fast for most of its history. Not anymore.
Amazon announced its first-quarter results on Thursday. The revenue increased by 9 percent in the first quarter, which is the same as the previous quarter.
Analysts who had expected even lower numbers thought the numbers were pretty good. Amazon shares, after a terrible 18 months, rose by more than 10% in Thursday's trading. However, they soon retreated as reality set in.
The revenue rose to $127.4 Billion, and the net income increased to 31 cents per share compared to a loss in 2022 of 38 cents. Analysts expected revenue of $124.55 and a profit per share of 21 cents.
Andy Jassy said, "From my perspective there is a lot to like about the way our teams deliver for customers, and the results that we are starting to see."
Advertising grew by 21 percent and Amazon Web Services grew by 16 percent. Amazon's online store, the core of Amazon for many consumers, saw its revenue fall by $33 million.
Mr. Jassy spoke extensively about how artificial intelligence, such as large language models and generative A.I. They power.
He said that the models weren't as compelling six to nine months ago. "They've gotten bigger and better so quickly. This is a great opportunity to transform almost every existing customer experience, as well as many others that do not exist.
Amazon, along with other tech companies, performed very well in the early days of the pandemic, when everyone was at home, but has experienced some difficulties since. Management is cutting back after expanding the retail distribution network in order to deal with an influx of business that didn't stick around.
The company's employment has decreased by 10 percent, or 150,000 employees, since its peak at the beginning of 2022. The company confirmed 27,000 layoffs since November in various divisions, including retail, cloud computing, and human resources. The warehouses and distribution networks have been hit the hardest.
In a Thursday call with journalists, Amazon's Chief Financial Officer, Brian Olsavsky did not rule out further layoffs. He said, "We will proceed adaptably."
Amazon's Big Tech competitors reported surprising good results this past week, after a winter of layoffs and weak results. Expectations were also lowered. Facebook's parent company, Meta, ended a losing streak of three quarters in revenue and sent its shares up by 10 percent. Google's advertising business performed better than expected while Microsoft's cloud-computing operation helped it achieve impressive results.
Amazon has chosen growth over profit for years, if not decades. Amazon put the establishment of new markets ahead of making money. This worked sometimes so well that it altered the nature of the business. AWS's growth was so rapid that it compensated for Amazon's poor returns in the retail sector.
A number of small businesses remained small. Amazon had been able to put off the decision of when to close them for many years, but not anymore. Amazon was forced to act by rising interest rates and a sceptical consumer base.
The company closed its Halo brand of fitness and health devices this week. Amazon is a major player in health care. However, fitness devices are a competitive market. Halo did not have the necessary success to break through. Amazon has also closed down Book Depository in recent weeks, an independent online bookseller that it purchased in 2011 and operated separately from its main book-selling division.
New Horizons are beckoning.
Mr. Jassy stated that "health care is a multi-trillion dollar business, which is highly segmented. It's also really broken in the U.S.