Amazon Expects 12% Revenue Growth and $11.2B Operating Income for Q4 as Cost-Cutting Measures Pay Off

Revenue growth of approximately 12% is expected from e-commerce giant Amazon in its latest financial report, marking four consecutive quarters of expansion in the low double digits and a slight acceleration compared to last year. Meanwhile, operating income for Q4 2023 is forecasted at $11.2 billion by StreetAccount, representing an over 130% increase from the previous year’s figure due to widespread cost-cutting measures, tweaks in fulfillment operations and stabilizing cloud spending. Under CEO Andy Jassy, Amazon has become more disciplined with its expenditures while expanding profitable services such as advertising, cloud computing, Prime memberships, and third-party marketplaces. The company’s shares have risen by 75% last year after a difficult 2021 and 2022, surpassing the Nasdaq Composite’s gain of approximately 6.5%. Amazon is projected to report an increase in AWS revenue of more than 12%, although this represents only slight growth compared to Q3 2023 when sales expanded by 13% but a significant uptick from Q1 2024, where revenues rose merely by 9%. Digital advertising is also likely to attract much-desired attention during the report; experts forecast ad revenue in excess of $11.7 billion year over year. Last week, Meta and Google reported strong digital advertising figures that exceeded market analysts’ expectations for Q4 2023. Wedbush analysts anticipate further robust growth within Amazon’s digital marketing segment during the first quarter, coupled with “healthy spending intent” throughout the remainder of this year. In a recent annual letter to shareholders published by Jassy himself, he also alluded that rising demand for AI-based technology could significantly benefit AWS in 2024 and beyond. Finally, some analysts speculate whether Amazon will follow Google’s lead and announce its first dividend at today’s financial conference. Amazon wrapped up Q4 of 2023 with a cash reserve totaling $73.4 billion. The company is scheduled to provide additional information on the earnings report in a conference call due at approximately 5:30 p.m. ET tonight (February 1, 2024).