(Reuters) -Amazon.com Inc on Thursday said it expects a jump in fourth-quarter revenue and profit, boosted by a holiday marketing blitz, faster delivery and improving outlook for its cloud division.
Shares rose 3% in after-hours trade.
Facing an array of challenges to its business, Amazon is trying to keep its mantle as the world’s biggest cloud provider and online retailer.
The company has sought to bolster its cloud, answering rivals Google and Microsoft with a deal to invest up to $4 billion in chatbot-maker Anthropic and touting an AI service drawing thousands of users. In retail, Amazon has reorganized its delivery network to locate goods closer to shoppers, letting it fulfill orders faster than before, and more cheaply.
Challenges have remained despite these efforts. The U.S. Federal Trade Commission in September sued Amazon for allegedly inflating prices and wielding monopoly power, claims that Amazon has disputed. The company has said it will contest the lawsuit.
Household budgets have remained tight in the meantime, while cloud customers have undergone a months-long process of scrutinizing their spending.
Against this backdrop, Amazon’s revenue in the third quarter rose 13% to $143.1 billion. Analysts on average expected revenue of $141.41 billion, according to LSEG data.
The company’s fortunes are, in particular, tied to those of its cloud-computing division. Long a major source of profit, Amazon Web Services (AWS) saw growth slow down in earlier quarters, while it is tackling significant costs to meet its AI goals. Microsoft, the second-largest cloud provider by revenue after Amazon, beat Wall Street estimates this week as its customers geared up for AI upgrades.
Andy Jassy, Amazon’s chief executive, said in a statement: “Our AWS growth continued to stabilize.”
Amazon Web Services brought in revenue of $23.1 billion, compared with analysts’ expectations of $23.09 billion.
Meanwhile, marketing events have helped prop up sales. Amazon said a summer shopping blitz known as Prime Day notched its biggest sales day ever, while a follow-up promotion period was its largest October holiday kickoff to date.
For the current holiday quarter, the company forecast revenue in the range of $160 billion and $167 billion. Analysts polled by LSEG were expecting revenue of $166.62 billion.
Amazon has aimed to operate more leanly in light of recent economic uncertainty. After planning 27,000 layoffs, or what had been 9% of its roughly 300,000-person staff starting last year, it has since revealed more role reductions at Amazon Fresh stores, for instance.
Net income rose to $9.9 billion in the third quarter from $2.87 billion a year earlier.
(Reporting by Akash Sriram in Bengaluru; Editing by Anil D’Silva and Deepa Babington)
