Amazon's Q1 2025 Performance Amid Trade Uncertainties
Amazon records robust growth in first-quarter earnings, but forecast clouded by tariff uncertainties
SARAH JANE NEW YORK (AP) - Amazon, the online juggernaut, coasted through the first quarter of 2025, smashing analyst expectations with profits and sales soaring. Despite the gloomy economic climate, Amazon's charm as a go-to destination for affordable goods and expansive selection has kept customers flocking.
In the aftermath of business paralysis induced by Trump's unpredictable trade policies, Amazon emerged unscathed. The Seattle-based giant boasts a reputation for withstanding economic uncertainties, keeping its footing while smaller retailers flounder.
Amazon, along with other major retailers, jumped through hoops to bring in foreign goods ahead of Trump's tariffs. According to Andy Jassy, Amazon's president and CEO, many third-party sellers followed suit to dodge the incoming price hikes. At least for now, these sellers have yet to adjust their pricing. Jassy expressed confidence that Amazon would bend over backwards to keep costs low, ready to weather the storm brewing on the economic horizon.
The e-commerce titan echoed a sentiment that resonates in any uncertain era: when times get tough, customers flock to the providers they trust the most. With its massive inventory, competitive pricing, and swift delivery, Amazon expects to maintain its strong position even as other players join the fray.
When Trump decides to pull the plug on a "de minimis" exemption that benefits China-originated e-commerce firms like Shein and Temu, things could get interesting. Even though new tariffs might put a squeeze on Amazon competitors, they would still take a bite out of Chinese sellers using Amazon's platform. The prices on Amazon's newly-launched online storefront, Amazon Haul, meant to compete with Shein and Temu, could also creep up in response to the new regulations.
Amazon sealed the deal for the quarter ending March 31, with net earnings totaling $17.13 billion, or $1.59 per share, compared to $10.43 billion, or 98 cents a share for the same period last year. Sales clocked in at $155.7 billion, growing 9% from the previous year. Amazon Web Services, the firm's buzzing cloud-computing division, expanded by 17%, generating $29.3 billion in revenue.
2025 is shaping up to be another year in the tech industry's intense race for generative AI dominance. As other companies ramp up their investment, Amazon is no exception. It's shelling out billions to expand data centers, develop its own computer chips, and cultivate AI models that integrate seamlessly with its existing operations.
Amazon's expenses on property and equipment escalated to $25.02 billion in Q1, up from $14.92 billion the year before. To serve customers living in less populated areas across the U.S., Amazon plans to invest $4 billion through 2026 to expand its rural delivery network, promising faster delivery times.
The company predicts sales to swell between $159 billion and $164 billion in the second quarter, slightly missing analysts' projections of $161.2 billion. Operating income is expected to rest between $13 billion and $17.5 billion, underperforming analyst expectations of $17.6 billion. Amazon's shares dipped more than 2% in after-hours trading, though, reflecting concerns over the company's earnings and outlook.
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