Amazon’s profits almost triple with revenue reaching $143.1 billion

The retailer expects robust profits for the entire year, even in the face of rising interest rates and a resurgence of customers returning to physical stores.

In the latest quarter, Amazon experienced a nearly threefold increase in profits, fueled by sustained high consumer spending, despite notable interest rate hikes. The multinational retail powerhouse anticipates robust sales growth for the rest of the year, although the initial impact included challenges posed by escalating prices and a resurgence of customers visiting physical stores.

For the three months ending on September 30, the group’s revenue surged by 13% to $143.1 billion, exceeding Wall Street’s expectations. Profits saw a substantial increase, reaching $9.9 billion, a significant jump from the $2.9 billion reported a year ago.

Amazon, known as the world’s largest retailer, has broadened its vast digital ecosystem beyond e-commerce. This expansion includes a diverse array of products and services, ranging from smart speakers to sports broadcasting, and it maintains a dominant position in the lucrative cloud computing sector through Amazon Web Services (AWS).

Andy Jassy, who took over as CEO from founder Jeff Bezos two years ago, highlighted the substantial progress made by Amazon’s retail division this summer. He emphasized the outstanding success of dividing Amazon’s US fulfillment network into eight distinct regions, exceeding their optimistic projections.

Amazon’s stocks have risen by almost 40% this year, signifying a rebound from the downturn in the tech industry last year. In after-hours trading, the company’s stock observed a 3.6% increase, currently maintaining a market capitalization surpassing $1.2 trillion.

While online shopping thrived during the peak of the pandemic, Amazon’s core retail segment encountered challenges due to the highest inflation in a generation, placing a burden on its customer base. In response to investor calls for cost reductions and a heightened focus on profitability, the company carried out layoffs, impacting 27,000 employees.

However, in the ongoing quarter, Amazon foresees total net sales in the range of $160 billion to $167 billion, indicating a potential increase of up to 12% compared to the previous year.

Amazon’s workforce, which experienced substantial growth in response to the COVID-19 outbreak through a global hiring initiative, reached its peak of 1.62 million employees at the beginning of last year. It has since decreased to 1.5 million.

In the spring of last year, workers in Staten Island, New York, successfully formed the first union in an Amazon US warehouse following a highly competitive campaign. While this development sparked optimism for similar unions in other locations, such efforts have not yielded results thus far.

In the month prior, the Federal Trade Commission, along with 17 state attorneys general, initiated a lawsuit against Amazon. The allegations suggested that the company had utilized its marketplace dominance to elevate prices on other platforms, overcharge sellers, and impede competition. Amazon contested the lawsuit, describing it as misguided, and cautioned that it could have adverse effects on consumers by leading to higher prices and delayed deliveries.