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(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 has aimed to keep its mantle as the world’s biggest cloud provider and online retailer.
The company has said it is stabilizing demand for 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 meanwhile remained tight, 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.
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.
Still, 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) has seen growth slow down in recent 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.
Amazon Web Services brought in revenue of $23.1 billion, compared with analysts’ expectations of $23.09 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)
