Amazon is starting the year in the blue. The e-commerce giant on Thursday posted a first-quarter profit of $3.2 billion, up from a loss of $3.8 billion in the year-ago quarter and far beating analysts’ estimates.
The shift to profit comes as Amazon has stepped up its cost-cutting measures in recent months. The company announced two rounds of layoffs, canceled products and canceled bricks-and-mortar expansions.
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It also comes as key areas of Amazon’s business continue to grow despite lingering fears of a recession, possibly weighing on corporate and consumer spending.
The company’s revenue increased 9% in the quarter year-over-year. Amazon expects second-quarter net sales to grow between 5% and 10% year-over-year, or between $127 billion and $133 billion.
“The results indicate that ongoing cost-cutting measures are having a positive impact on Amazon’s business prospects,” said Jesse Cohen, senior analyst at Investing.com. “Amazon’s strong guidance for Q2 revenue is another indicator that the company may be starting to get out of the woods.”
Amazon Web Services, which has long served as a profit engine for the company, also experienced double-digit percentage growth during the quarter, in another positive sign for its overall business.
AWS segment sales increased 16% year-over-year to $21.4 billion. This comes after sales growth slowed in the previous quarter as cloud customers tightened their pockets due to uncertainty over the health of the economy.
“While our AWS business drives companies to spend more cautiously in this macro environment, we continue to prioritize building long-term customer relationships,” said CEO Andy Jassy in a statement accompanying the earnings release.
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