Amazon Q2 beats on top, bottom lines; sales jump

Amazon came out swinging in the second quarter and reported upbeat guidance.

The online giant posted a blowout quarter amid strong e-commerce and cloud sales, and earnings that blew past Street expectations.  It reported net income of $6.7 billion, or $0.65 a share, for the quarter ended June 30, compared to a loss of $2 billion, or $0.20 a share, in the year-ago period.  Analysts had expected earnings of $0.35 a share.

In another positive sign, the company's closely-watched operating income increased to $7.7 billion from $3.3 billion in the year-ago quarter.

Net sales rose to $134.4 billion from $121.2 billion, ahead of analysts' estimates of $131.5 billion.  In the physical stores category, which includes Whole Foods Market and Amazon Go stores,  revenue rose 6% to $5 billion. Subscription services revenue, which includes Prime memberships, increased 14% to $9.8 billion. 

“It was another strong quarter of progress for Amazon,” stated Andy Jassy, CEO, 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."

Amazon noted that it delivered its largest selection of products to Prime members in the United States at the fastest speeds ever. Across the top 60 largest U.S. metro areas, more than half of Prime member orders arrived the same or next day. 

Sales in the company's lucrative cloud-computing division, Amazon Web Services (AWS), rose 12% to $22.1 billion. Jassy noted that AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and as AWS "continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases."

Advertising revenue jumped 22% $10.68 billion from $8.8 billion a year ago. 

We’re 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," Jassy said. 

For the third quarter, Amazon expects sales of $138 billion to $143 billion, or to grow between 9% and 13% from the year-ago period, which is more than analysts were expecting. Operating income is expected to be between $5.5 billion and $8.5 billion, compared with $2.5 billion in the year-earlier period.