NEW YORK (AP) — Amazon posted higher first-quarter profit and sales that beat analysts' projections, underscoring the online behemoth's hold on shoppers looking for low prices and a wide selection in an uncertain economy.
The Seattle-based company also reported strong sales growth for its prominent cloud computing arm Amazon Web Services, it said after the market closed Thursday.
However, uncertainty about President Donald Trump's tariffs and consumer spending clouded Amazon's outlook.
Trump’s erratic trade policies — including 145% tariffs on China — have paralyzed businesses and threaten to raise prices and hurt consumers. However, big companies like Amazon are expected to navigate the climate better than small retailers.
Amazon, along with many large retailers and suppliers, have tried to beat the clock by bringing in foreign goods before Trump’s tariffs took effect. And Amazon's president and CEO Andy Jassy told analysts during its earnings call that many of its third party sellers did the same. And because of that move, a fair amount of third-party sellers haven’t changed their pricing yet, he said.
Jassy vowed that Amazon would do everything it could to keep prices low, and while he acknowledged challenges ahead, he touted Amazon's model of vast selection that would help it navigate this new climate.
“When there are uncertain environments, customers tend to choose the provider they trust most,” Jassy told analysts. “Given our really broad selection, low pricing, and speedy delivery, we have emerged from these uncertain eras with more relative market segment share than we started, and better set up for the future.”
On Friday, Trump is also ending a trade exemption that allowed low-value shipments from China to bypass duties, an exemption that had given an advantage to China-founded e-commerce firms, such as Shein and Temu.
The new tariffs could benefit Amazon by increasing costs for its competitors. But it would also affect Chinese sellers who connect with American consumers on the company’s shopping platform. Furthermore, it could increase prices on a recently-launched online storefront that Amazon set up to ship low-cost products directly from China. The storefront, called Amazon Haul, was Amazon’s answer to Shein and Temu.
Amazon said that it earned $17.13 billion, or $1.59 per share, for the quarter ended March 31. That's up from $10.43 billion, or 98 cents a share, in the year-ago period.
Revenue rose 9% to $155.7 billion, up from $143.3 billion from the year-ago period.
Sales for Amazon Web services rose 17% to $29.3 billion during the fiscal first quarter.
Amazon is one of the biggest players in the race around generative artificial intelligence. Like other tech companies, it has increased investments in the technology and is spending billions to expand data centers that bolster AI and cloud computing. The company is also investing in its own computer chips and those developed by Nvidia. It has also expanded its own AI models and integrated generative AI into other parts of its business.
In the first quarter, Amazon reported spending $25.02 billion on property and equipment, higher than the $14.92 billion spent in same period in 2024.
Amazon this week announced a $4 billion investment through 2026 to expand its rural delivery network to bring faster delivery to customers in less densely populated areas across the U.S.
The company said it expects sales in the second quarter to be anywhere from $159 billion to $164 billion. Analysts projected $161.2 billion, according to FactSet.
It also projects operating income to be in the range of $13 billion to $17.5 billion for the fiscal second quarter. Analysts expect $17.6 billion, according to FactSet.
Amazon shares fell more than 2% in after-hours trading on Thursday.
FILE - An Amazon truck drives in in Philadelphia, Friday, April 30, 2021. (AP Photo/Matt Rourke, file)
