Amazon reports significant increase in operating profit, free cash flow, revenue, and potential for growth
From Nasdaq: 2024-05-06 06:07:00
Amazon CEO Andy Jassy highlighted a significant increase in operating profit and free cash flow in the 2023 annual letter. Operating income surged from $12.2 billion in 2022 to $36.9 billion in 2023, while FCF rose from negative $12.8 billion to positive $35.5 billion. The company’s strong performance in 2023 sets the stage for further growth in 2024.
Amazon reported a revenue increase of 13% to $143 billion in Q1 2024, with operating income reaching $15.3 billion. Expectations for Q2 show a 7% to 11% revenue growth with operating income projected to rise by as much as 82% to $14 billion. The company’s disciplined expense management continues to drive higher profits.
Amazon’s segments, including North America, International, and AWS, all demonstrated strong performance in Q1 2024. AWS, in particular, reported a profit margin increase and a sales growth of 16.8% year-over-year. Industry experts predict a further uptick in cloud spending, which could benefit Amazon’s bottom line significantly.
Investors are optimistic about Amazon’s future as the company shows potential for growth and increased profitability. With the cloud industry expected to expand, Amazon’s AWS business could drive further success. Analysts project FCF of $60 billion in 2024, with potential for over $70 billion in 2025. Shares of Amazon are trading at 32 times the consensus FCF estimate for 2024.
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Amazon board member John Mackey and client advisor Nicholas Rossolillo have positions in the company, which is recommended by The Motley Fool. Disclosure policies apply. As Amazon continues to drive profitability and growth, the stock remains a favored choice among investors.
Read more at Nasdaq: Amazon Stock Could Still Be a Magnificent Long-Term Value