Amazon soars on big revenue growth
Amazon's third quarter blew past market expectations as the online giant benefited from a $1 billion-plus sales infusion from Whole Foods Market and a revenue surge in its cloud computing business.
Amazon's net sales increased 34% to a better-than-expected $43.7 billion in the quarter ended Sept. 30, compared with $32.7 billion last year. The results include $1.3 billion from Whole Foods Market, which Amazon acquired in August. Results also include Amazon's cloud computing division (AWS), where revenue rose to $4.58 billion from $3.2 billion last year.
Excluding Whole Foods Market and the $124 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29% compared with the year-ago period.
Amazon's net income crushed expectations. It totaled of $256 million, or fifty-two cents per diluted share, compared with net income of $252 million in the year-ago period. Analysts had estimated three cents a share.
The only downbeat note was operating income, which decreased 40% to $347 million as operating expenses grew 45% from a year ago. This compares with operating income of $575 million in the year-ago period.
Commenting on the results, Neil Saunders, managing director of GlobalData Retail, said that for all Amazon's undoubted success, there are a few chinks in the behemoth's armor, mainly profit.
"For the quarter, operating income was down by 40% to $347 million," he noted. "The dramatic growth of marketing costs, which were partly a function of the Whole Foods acquisition as well as the substantial promotion of new devices, took its toll on the bottom line. Fulfillment and shipping costs also increased faster than sales, although the pace of increase is not quite as bad as feared." To read more, click here.
Amazon's fourth quarter guidance was in the range of $56.0 billion and $60.5 billion, in line with analysts' estimates of $58.9 billion.
In reporting its results, Amazon touted a long list of quarterly highlights that reflected the breadth of its offerings. Included in the list: the purchase of Whole Foods, the introduction of three new Echo devices, new developments with Alex, the launch of an in-home delivery service, new Amazon Studio deals, and more.
Amazon's net sales increased 34% to a better-than-expected $43.7 billion in the quarter ended Sept. 30, compared with $32.7 billion last year. The results include $1.3 billion from Whole Foods Market, which Amazon acquired in August. Results also include Amazon's cloud computing division (AWS), where revenue rose to $4.58 billion from $3.2 billion last year.
Excluding Whole Foods Market and the $124 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29% compared with the year-ago period.
Amazon's net income crushed expectations. It totaled of $256 million, or fifty-two cents per diluted share, compared with net income of $252 million in the year-ago period. Analysts had estimated three cents a share.
The only downbeat note was operating income, which decreased 40% to $347 million as operating expenses grew 45% from a year ago. This compares with operating income of $575 million in the year-ago period.
Commenting on the results, Neil Saunders, managing director of GlobalData Retail, said that for all Amazon's undoubted success, there are a few chinks in the behemoth's armor, mainly profit.
"For the quarter, operating income was down by 40% to $347 million," he noted. "The dramatic growth of marketing costs, which were partly a function of the Whole Foods acquisition as well as the substantial promotion of new devices, took its toll on the bottom line. Fulfillment and shipping costs also increased faster than sales, although the pace of increase is not quite as bad as feared." To read more, click here.
Amazon's fourth quarter guidance was in the range of $56.0 billion and $60.5 billion, in line with analysts' estimates of $58.9 billion.
In reporting its results, Amazon touted a long list of quarterly highlights that reflected the breadth of its offerings. Included in the list: the purchase of Whole Foods, the introduction of three new Echo devices, new developments with Alex, the launch of an in-home delivery service, new Amazon Studio deals, and more.