Amazon Reports $9.9B Q3 Profit as Sales Surge 13%: Online Retail Giant Shows Strong Growth
Amazon, the online retail colossus, recently announced a profit of $9.9 billion for the third quarter, driven by increased sales and improved delivery efficiency. The company reported sales of $143.1 billion, representing a 13% increase compared to the same period last year.
CEO Andy Jassy stated that the third quarter was strong for Amazon, with advancements in cost-to-serve and delivery speed in their Stores business. He also highlighted the robust growth of their advertising business and the continued stabilization of their AWS cloud computing division.
Analyst Zak Stambor from Insider Intelligence commented that Amazon’s earnings exceeded expectations, attributing their success to cost-cutting measures and a strategic focus on high-margin areas like their online marketplace and advertising.
However, Amazon has faced legal challenges, with a top US antitrust regulator filing a lawsuit against the company, accusing it of maintaining illegal monopolies by exerting control over sellers and stifling potential competitors.
Despite these challenges, Amazon remains focused on meeting increasing shopping demands. The company plans to hire 250,000 employees in the United States and invest $1.3 billion to raise the average hourly wage for delivery and fulfillment jobs to over $20.50.
Amazon is also expanding its drone delivery service to additional US states, as well as to Britain and Italy by the end of 2024. The company has made significant investments in robotics systems and currently employs 750,000 robots in its warehouses to enhance delivery speed.
While increased productivity through automation is beneficial for Amazon’s growth, critics argue that it does not address underlying worker concerns. Critics claim that Amazon prioritizes exploiting workers and discarding them when no longer needed.
Despite these criticisms, Amazon’s advertising business continues to thrive, benefiting from the use of generative artificial intelligence to create eye-catching ads on their online marketplace. Insider Intelligence predicts that Amazon’s US advertising business will generate nearly $34 billion in revenue this year.
Nevertheless, Amazon’s cloud computing unit, Amazon Web Services (AWS), experienced slower growth compared to its rivals Microsoft and Google.
To keep pace in the field of artificial intelligence, Amazon recently made a significant investment in AI firm Anthropic. By utilizing Amazon’s chips and AWS services, Anthropic plans to develop advanced models and perform mission-critical workloads.
Amazon’s commitment to enhancing its AI capabilities extends to its voice assistant, Alexa, as the company aims to achieve more natural and seamless conversations.
In summary, Amazon’s strong third-quarter performance reflects its growth in sales and delivery efficiency. Despite legal challenges and criticism, the company continues to expand and invest in technological advancements. With a thriving advertising business and the pursuit of AI innovation, Amazon remains a dominant player in the e-commerce market.
