Amazon.com, Inc. Skyrockets After Posting Surprise Profit

Amazon stockBy Szk7788 (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Amazon released its third quarter earnings report after closing bell tonight, posting profits of 17 cents per share on $25.4 billion in revenue, a 23% increase year over year. Analysts had been projecting losses of 13 cents per share and $24.91 billion in revenue. In last year’s third quarter, the online retailer posted losses of 95 cents per share and $20.58 billion in revenue.

Amazon product sales up

Amazon saw product sales climb from $16 billion last year to $18.5 billion this year. Net service sales climbed from last year’s $4.56 billion to $6.9 billion. Fulfilment expenses rose from $2.6 billion last year to $3.2 billion.

Net sales in North America rose from $11.7 billion last year to $15 billion this year. International sales rose from $7.7 billion to $8.3 billion. Amazon Web Services recorded sales of $2.1 billion, compared to last year’s $1.2 billion.

Among the operational highlights from the quarter was the introduction of four new tablets. Amazon also unveiled three new Fire TV devices, all of which feature Alexa integration. The online retailer also reported an “overwhelmingly positive customer response” to the Amazon Dash Button.

“For the first time, we’re recommending you bring home a six-pack for the whole family,” said Amazon founder and CEO Jeff Bezos in a statement. “At a price of $50 for one or $250 for a six-pack, Fire sets a new bar for what customers should expect from a low-cost tablet. This is one more step in our mission to bring customers premium products at non-premium prices. Fire is the #1 best-selling product on Amazon.com since launch, and based on the strength of the customer response, we are building millions more than we’d already planned.”

Amazon updates guidance

For the fourth quarter, Amazon management expects net sales to be between $33.5 billion and $36.75 billion, representing a growth rate of between 14% and 25% for the quarter. The estimate is in line with analyst estimates of $33.16 billion. They expect operating income to come in between $80 million and $1.28 billion, compared to last year’s $591 million.

Shares of Amazon soared in after-hours trades, climbing as much as 9.51% to $617.52 per share.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

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