Sales for the three months ending in June grew 7% to $121.23 billion, which was higher than Wall Street’s expected $119.09 billion. It represented Amazon’s third straight quarter of single-digit annual revenue growth.
Amazon’s third-quarter forecast suggested growth could reaccelerate, to between 13% and 17%. The company said it projects revenue this quarter of $125 billion to $130 billion, while analysts were expecting sales of $126.4 billion, according to Refinitiv.
Amazon and Apple reported upbeat results in an otherwise gloomy earnings season for tech companies. Facebook parent Meta, Alphabet and Microsoft all reported disappointing results for the quarter, as decades-high inflation, rising interest rates and other macroeconomic pressures weighed on their businesses.
Wall Street cheered Amazon’s earnings report, with one analyst calling the e-commerce giant “a port in the macro storm,” as it so far appears to be weathering many of the headwinds challenging its tech peers.
“All in, Amazon provided investors with a very clean 2Q earnings, in the midst of extreme macro-related earnings volatility across tech,” Deutsche Bank analysts led by Lee Horowitz wrote in a note to clients Friday. The firm, which maintains a buy rating on Amazon shares, upped its price target to $175 from $155.
Several analysts said the results signaled Amazon is making progress on cost headwinds that have pressured the company in recent quarters. Amazon has faced high costs related to labor, supply chain, energy and transportation, as well as the Covid-19 pandemic, among other factors. CEO Andy Jassy said Thursday the company continues to work through “the more controllable costs.”
“With a successful 2-day Prime Day event in July and mgmt [management] discussing end demand concerns in its core businesses, we see Amazon well positioned to produce a strong revenue growth narrative in 2H’22 [the second half of 2022],” analysts at Goldman Sachs, led by Eric Sheridan, said in a research note on Friday. The firm kept its buy rating on shares.