Amazon reported impressive revenue and profits for the second quarter, surpassing market expectations and leading to a surge in its stock value during after-hours trading.

The renowned e-commerce giant achieved earnings of $6.7 billion, equivalent to 65 cents per share, in the quarter ending on June 30. This figure significantly exceeded the projections of industry analysts surveyed by FactSet, who had anticipated profits of $3.64 billion.

Associated Press reported that in contrast to the previous year's equivalent period, during which Amazon experienced losses primarily due to a substantial setback in its investment with electric vehicle startup Rivian Automotive, the company marked a considerable turnaround. 

Notably, the profits for the second quarter were augmented by a pre-tax valuation gain of $0.2 billion related to its investment in Rivian.

Amazon's Financial Report Summary

During this period, net sales demonstrated an 11% increase, reaching $134.4 billion compared to the $121.2 billion recorded in the second quarter of 2022. 

An adjustment from the $0.3 billion adverse impact stemming from changes in foreign exchange rates throughout the quarter, net sales experienced an 11% growth compared to the same period in the preceding year.

Specifically, the North American segment contributed significantly to this positive trend, witnessing an 11% rise in sales to $82.5 billion. Similarly, the International segment displayed a 10% surge in sales, amounting to $29.7 billion. 

The Amazon Web Services (AWS) segment also exhibited a 12% increase in sales, totaling $22.1 billion. Operating income rose remarkably, reaching $7.7 billion in the second quarter. It stands in contrast to the $3.3 billion recorded in the second quarter of 2022. 

The North American segment's operating income surged to $3.2 billion, a significant progression from the $0.6 billion operating loss reported in the same period of the preceding year. 

In contrast, the International segment's operating loss narrowed to $0.9 billion, compared to the $1.8 billion loss in the second quarter of 2022. The AWS segment maintained solid performance with an operating income of $5.4 billion, slightly lower than the $5.7 billion reported in the second quarter of 2022.

Net income for the second quarter amounted to $6.7 billion, equivalent to $0.65 per diluted share. It is in stark contrast to the net loss of $2.0 billion, or $0.20 per diluted share, reported during the same period in 2022. 

Read Also: Amazon CEO Andy Jassy Highlights 'Multiple Generative AI Initiatives' Across All Divisions

Robust Financial Operation of Amazon

The second quarter of 2023 has also included a pre-tax valuation gain of $0.2 billion related to Amazon's investment in Rivian Automotive. It marks a significant shift from the pre-tax valuation loss of $3.9 billion in the same quarter of the previous year.

Amazon's robust financial performance is further evidenced by its substantial improvements in cash flow. Operating cash flow demonstrated a remarkable 74% increase, reaching $61.8 billion for the trailing twelve months compared to $35.6 billion for the same period ending June 30, 2022. 

Additionally, free cash flow displayed marked improvement, transitioning from an outflow of $23.5 billion in the trailing twelve months ending June 30, 2022, to an inflow of $7.9 billion for the same period in 2023. 

Furthermore, various metrics of free cash flow, including those accounting for different financial obligations, showcased notable improvements, underscoring Amazon's strong financial position. 

Related Article: Amazon Prime Day 2023 Hailed 'Biggest Ever' Sales in the US With $12.7 Billion Consumer Spending