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As Amazon prepares to report their first-quarter earnings after the bell on Tuesday, analysts are expecting to see an earnings per share of 83 cents and a revenue of $142.5 billion. There are several key numbers that Wall Street will be keeping an eye on during the report, such as Amazon Web Services with a projected revenue of $24.5 billion and advertising revenue of $11.7 billion. The company is expected to report revenue growth of 12%, marking a fourth consecutive quarter of growth in the low double digits.

Under the leadership of CEO Andy Jassy, Amazon has implemented measures to streamline costs and enhance profitability. The company has focused on growing profitable services like advertising, cloud computing, Prime memberships, and third-party marketplace. This strategy has resulted in earnings growing rapidly, with operating income expected to be $11.2 billion, reflecting a significant increase of over 130% from a year earlier.

Recent Performance and Market Standing

After experiencing a challenging period in 2021 and 2022, Amazon’s shares soared by 75% last year. Year to date, the company has gained 19%, outperforming the Nasdaq Composite. Analysts project a 12% increase in revenue for Amazon Web Services, showcasing a slight deceleration from the previous quarter but a notable uptick from the same period in 2023. Executives have expressed optimism about the increased demand for artificial intelligence technology, which is expected to benefit AWS.

Revenue Projections and Advertising Growth

Advertising revenue, a high-margin business for Amazon, is projected to grow by more than 23% year over year to reach $11.7 billion. Industry peers such as Meta, Google, and Snap have reported strong earnings that surpassed analysts’ expectations, setting a positive precedent for Amazon’s upcoming report. Wedbush analysts foresee robust growth in Amazon’s ad business for the first quarter and anticipate continued growth throughout 2024, supported by various advertising opportunities and the ongoing monetization of Prime Video ads.

While discussing the results on a conference call with investors at 5:30 p.m. ET, Amazon may consider following the footsteps of its tech peers by announcing its first-ever dividend. Google parent Alphabet recently issued its first dividend alongside its quarterly results, and Meta authorized its inaugural dividend in February. With Amazon ending 2023 with $73.4 billion in cash and equivalents, a dividend announcement could further boost investor confidence.

Amazon’s upcoming earnings report is highly anticipated by analysts and investors alike, with a focus on key metrics such as revenue, earnings, and growth areas like AWS and advertising. The company’s strategic cost-cutting measures and focus on profitable services have positioned it for continued success in the market. Keep an eye on Amazon’s performance post-earnings report to gauge the company’s financial health and future prospects.

Earnings

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