Amazon reported strong financial results in the third quarter that beat analyst expectations, sending shares soaring more than 7 percent in after-hours trading.
Amazon’s stock price is soaring after its financial results crushed third-quarter expectations
A 10th straight quarter of profit — albeit a small one.
Photo by Tibrina Hobson/Getty Images
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The company recorded a profit of 52 cents per share on $43.7 billion in revenue in the quarter, easily beating average estimates of three cents a share on $42.1 billion in revenue. The company’s revenue total for the quarter includes $1.3 billion from its new subsidiary, Whole Foods, which it acquired in late August.
Even at its massive size, Amazon still grew revenue 29 percent year over year, not counting the Whole Foods addition nor a $124 million favorable impact from changes in foreign exchange rates.
Retail growth was driven by the company’s biggest shopping day of the year — Prime Day, which was received especially strongly in international markets, the company’s CFO said on a call with reporters.
Amazon’s fastest-growing core business continues to be Amazon Web Services, which grew 42 percent year over year and now accounts for 11 percent of the company’s total revenue. That growth rate, however, is decelerated from 55 percent in the second quarter.
The company’s operating income of $347 million was lower than the same quarter last year, but past the top end of the range that Amazon had forecast. Amazon’s North America retail business basically runs at breakeven and its international business at a loss. But AWS has operating profit margins of 26 percent, making its profitable growth extra important to Amazon’s future success.
With a net income of $256 million, this is Amazon’s 10th straight quarter of posting a profit.
This article originally appeared on Recode.net.
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