Amazon's International Division Set To Achieve Profitability After Years of Losses: Report

Author: Nabaparna Bhattacharya | July 02, 2024 12:30pm

Amazon.Com, Inc.’s (NASDAQ:AMZN) international division is reportedly poised to achieve an annual profit, benefiting from efforts to streamline the retailer’s logistics operations following years of losses.

According to analysts in a recent Refinitiv poll, Amazon’s international unit, which serves customers outside North America, is expected to achieve an operating profit of $1.6 billion this year, projected to increase to over $5 billion next year, reported Financial Times.

JPMorgan analysts are even more optimistic, forecasting $4.3 billion in profits for 2024.

The tech group’s international segment incurred a $2.7 billion operating loss last year.

However, a robust performance in early 2024 has propelled the business into profitability in the first quarter.

The segment had last reported an annual profit during the pandemic, coinciding with a brief surge in ecommerce activities, the report added.

Amazon’s turnaround is attributed to improved organization of warehouses and delivery operations in key global markets like Germany and the U.K., resulting in quicker deliveries and more cost-effective local operations.

Amazon’s international operations, launched in 1998, have historically struggled, accumulating $18.8 billion in operating losses since 2016.

The recent North American logistics reorganization aims to cut delivery costs and boost efficiency, contrasting with the profitable domestic segment’s operating income of $14.9 billion last year, Financial Times added.

Price Action: AMZN shares are trading higher by 0.20% to $197.60 at last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo by Sundry Photography on Shutterstock

Read Next: