Amazon posted stronger than expected sales for the 2022 holiday shopping season, but shares fell in after-hours trading on slowed growth for its cloud computing division, AWS.
Overall, net sales for the ecommerce group, which has been battling cost-conscious consumers and spiralling costs, were $142.2bn in the three months to December 31, up 9 per cent from 2021 and exceeding analysts’ estimates. Robust sales events during the holiday season offered glimmers of hope that Amazon’s retail business may be staging a recovery.
But operating income for AWS, its largest profit driver, dropped marginally on last year. Sales growth fell to 20 per cent, compared to 40 per cent a year ago.
“Everyone’s trying to cut their budgets,” said Amazon’s chief financial officer, Brian Olsavsky. “We feel very bullish about where we are . . . but we do expect to see some slower growth rates for the next few quarters.”
Still, AWS helped prop up Amazon’s bottom line. Its non-cloud businesses recorded $2.4bn in operating losses in the quarter.
Amazon’s overall operating income fell to $2.7bn, from $3.5bn in the same period last year. Analysts had expected $2.65bn, according to FactSet.
It said its operating income was hit by $2.7bn in charges related to “self-insurance liabilities, impairments of property and equipment and operating leases, and estimated severance costs”.
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