Amazon boosted by resilient demand for online shopping
Amazon's first-quarter revenue beat estimates on Thursday, helped by resilient demand for online shopping and cloud services businesses, sending its shares up about 9% in extended trading.
The world's biggest online retailer reported better-than-expected net sales of $127.36bn (€115.48bn) in the first three months of the year and forecast sales between $127bn and $133bn in the second quarter.
Analysts had expected sales of $129.83bn in the quarter ending June 30.
The growth of Amazon Web Services, long a major source of profit, slowed to 15.8% in the first quarter, while recession-wary businesses have slowed their spending.
Net profit stood at $3.17bn in the quarter ended March 31, compared with a loss of $3.84bn, a year earlier.
Addressing ongoing worries about the economy, CEO Andy Jassy has aimed to clamp down on spending across Amazon's vast array of businesses.
Last month, he said Amazon would cut more jobs from its long-profitable cloud and advertising divisions, expanding the company's layoffs since Novemberto 27,000 employees, or 9% of its roughly 300,000-strong corporate staff.
Amazon likewise has ended entire services, including on Wednesday when it said it would pull its lineup of Halo health trackers and refund recent purchases.
At the same time, it is seeking new revenue in the face of inflation that hurt retail demand in Europe, among other challenges.
Beyond higher grocery delivery fees for US Prime loyalty members, it is offering them an add-on generic-drug subscription and it marketed discounted membership for primary care services after it closed a deal to buy provider One Medical in February.
Elsewhere, chipmaker Intel forecast second-quarter revenue above Wall St estimates, a sign that chip demand was recovering after a downturn wrought by excess supply and a post-pandemic slump in the personal computer market.
Shares of the company rose 2% in extended trading, having gained more than 10% so far this year following a tough 2022.
A fall of about 30% in first-quarter global PC shipments has made some chip industry experts hopeful that a build-up of inventory has cleared out, paving the way for fresh orders.
Intel has also ramped up shipping of its most powerful data centre chip Sapphire Rapids, which was delayed for over a year.
The company forecast second-quarter adjusted revenue in the range of about $11.5bn and $12.5bn. Analysts polled by Refinitiv were expecting revenue of $11.75bn.
Intel has also ramped up shipments of its most powerful data center chip, Sapphire Rapids, whose more than one-year delay had allowed rival AMD and ARM-based server CPU makers to take market share from the company.
Still, Intel has a commanding share of the markets for PC and server processing chips and the company has planned to spend billions of dollars to build out new manufacturing hubs and improve the design and performance of its products.
Revenue from its data centre and AI group fell 39% to $3.7bn. Client computing group revenue, which includes PCs, fell 38% to $5.8bn.
Intel's aggressive push has, however, come at a cost.
The company in February slashed its dividend payout to the lowest in 16 years as it saves cash for investments.
Revenue in the first quarter was $11.72bn, compared to estimates of $11.04bn.
Meanwhile, corporate results on both sides of the Atlantic have so far pointed to no recession threat despite inflation and interest-rate hikes, at least for now.
In Europe, shares in grocery giant Unilever rose on better-than-expected quarterly underlying sales, as the supplier raised prices yet again to compensate for higher commodity and supply-chain costs. Unilever makes Domestos and Cif cleaners, Sunsilk and Lifebuoy soaps, Hellmann's and Knorr foods, and Ben & Jerry's, Magnum, and Cornetto ice-creams.
Both Barclays and Deutcshe Bank delivered estimate-beating quarterly profits, helping ease global banking fears.
In the US, results from Mastercard and car-rental giant Hertz Global pointed to strong summer demand. Hertz said it was preparing for strong summer travel demand, driving its shares up as much as 4%.
Mastercard has bet on resilient travel spending. "Consumer spending has remained remarkably resilient, and that despite continued economic uncertainty," said chief executive Michael Miebach.
However, Mastercard also disclosed the US Justice Department was conducting a competition probe of its US debit programme.
- Reuters. Additional reporting:
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