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Amazon expects a jump in its third-quarter revenue as the company on Thursday said that the retailer collects bigger fees from Prime loyalty subscriptions and consumer demand remands higher in spite increasing inflation.

The company's shares rose 13% in trading after the bell, increasing its market valuation by more than $150 billion, according to news agency Reuters.

This week, its major rival Walmart Inc said that it would make much less this year than it once expected because U.S. consumer confidence has fallen to a recent low, and some are still sticking to lower-priced essentials to manage economic woes. However, this has not stopped Amazon.

The agency reported that the online retailer net sales between $125 billion and $130 billion for this summer period, while the analysts were expecting only $126.42 billion, according to IBES data from Refinitic as reported by Reuters.

In an official statement, Chief Executive Andy Jassy said the company is witnessing accelaeration in revenue as it continues to update Prime for the members, adding unique benefits like free delivery for a year to it.

Even though, Amazon had more products in its stock than it had before the Covid-19 pandemic in 2020, Chief Financial Officer Olsavsky told reporters on a conference call. According to the company's press statement, it has doubled the number of items it could deliver just a day after purchase, marking on a long-term commitment. The release stated that Amazon's July marketing event 'Prime Day' was the biggest ever by unit sales.

Andrew Lipsman, Insider Intelligence analyst said, "It seems that Amazon is finally primed to turn the corner after a rocky couple of quarters."

In North America, Amazon's largest market, net sales rose 10% in the just-ended second quarter as compared to 22% gain in the same period last year. The company's international unit witnessed 12% of outright decline. This period of record profit paved way in the first quarter of 2022 to Amazon's first quarterly loss in past seven years.

The online retail company has lost $2 billion in the second quarter, including a pre-tax valuation loss of $3.9 billion from its investment in Rivian Automotive Inc. However, it beat the expectation in posting operating income of $3.3 billion, according to research firm FactSet.

 

(With agencies inputs)

 

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