In the second quarter, Amazon posted strong earnings even as its overall and product sales advanced.
Second quarter 2023 net income includes a pre-tax valuation gain of $200 million included in non-operating expenses from the common stock investment in Rivian Automotive, versus a pre-tax valuation loss of $3.9 billion from that investment in 2022 second quarter, the company pointed out.
Amazon beat a Zacks Investment Research analyst consensus estimate for diluted earnings per share of 34 cents. Revenues beat the Zacks estimate by 2.16%.
Net sales advanced 11% to $134.38 billion and product sales increased to $59.03 billion from $56.58 billion as the North American segment sales increased at the same 11% rate to $82.55 billion versus the quarter a year prior. International segment sales increased 10% to $29.7 billion while the business-to-business AWS segment sales gained 12% year-over-year to $22.14 billion.
Operating income increased to $7.68 billion versus $3.32 billion in the year-earlier period as North America segment operating income came in at $3.21 billion versus an operating loss of $627 million in the quarter a year before The International segment posted an operating loss of $895 million compared with an operating loss of $1.77 billion while AWS segment operating income slipped to $5.37 billion versus $5.72 billion in the period year over year, Amazon reported.
Recent business highlights include Amazon’s expanding assortments in the United States with the additions, for example, of D’Amelio Footwear, Dyson hair care, IT Cosmetics and Ralph Lauren Fragrances, and extending its collaboration with Victoria’s Secret. Amazon also partnered with Pinterest to display ads for Amazon products on its website.
In pointing out highlights since the quarter ended on June 30, Amazon stated that its Prime Day event, held July 11-12, was its biggest ever. Prime members worldwide purchased more than 375 million items and saved more than $2.5 billion, the company maintained. Amazon asserted that it offered more deals this year than it has in any past Prime Day, with Home, Fashion and Beauty among the top-selling deal categories. The company added that the most recent event also was the biggest Prime Day for Amazon’s independent sellers and the first when U.S.-based Prime members could shop deals directly from merchant sites via Buy with Prime.
Amazon CEO Andy Jassy, in introducing the second quarter results, said, “It was another strong quarter of progress for Amazon. We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded. Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models, customize Large Language Models to build generative AI applications and agents, and write code much more efficiently with CodeWhisperer. We’re also continuing to see strong demand for our advertising services as the team keeps innovating for brands, including the ramp up for Thursday Night Football with the ability for advertisers to tailor their spots by audience and create interactive experiences for consumers.”
