Amazon’s third-quarter earnings tempo Street estimates, but its revenue and fourth-quarter outlook fell short of presumptions, dropping its stock roughly 9 percent in after-hours trading — on pace for its lessest close since May.
Here are the most important numbers:
- EPS: $5.75 vs. $3.14 guessed, according to Refinitiv
- Revenue: $56.6 billion vs. $57.10 billion estimated, agreeing to Refinitiv
- AWS revenue: $6.68 billion vs. $6.71 billion estimated, according to FactSet
The throng gave fourth-quarter revenue guidance in the range of $66.5 billion and $72.5 billion, well-below consensus of $73.79 billion. The fourth house is the biggest and most important sales period for Amazon because of the breaks.
The results show how Amazon could have a disappointing holiday opportunity ripe in its all-important fourth-quarter, as the overall business sees a slight deceleration in proliferation. At the same time, it highlights the growth of Amazon’s high-margin businesses, relish its cloud and advertising units, that are more profitable than its sum retail segment.
Its fourth-quarter operating income guidance of $2.1 billion to $3.6 billion was also underneath Street expectations of $3.9 billion. Amazon said the wage multiply announced earlier this month was incorporated into the guidance, but declined to quantify its import.
Total revenue increased 29 percent from last year. North American vendings were $34.3 billion, up 35 percent from last year, while worldwide sales grew just 13 percent to $15.5 billion. AWS persevere in to show strong growth, jumping 46 percent in sales, although it by a hairs breadth missed expectations. Amazon’s “other” category, mostly comprised of its burgeoning advertising occupation, jumped 123 percent to $2.5 billion in revenue.
Net income, for the time being, grew more than 10-times from the year-ago period, to a record-high $2.8 billion, impression the fourth straight quarter of topping $1 billion in profits. The $3.7 billion in plying income far-exceeded Street estimates of $2.1 billion. The widening profits are by driven by the growth of Amazon’s high-margin businesses, including its cloud, advertising and third-party seller services.
“We were explicitly impressed by the continued YoY operating margin expansion, which is consistent with our rate the company has transformed into a ‘profit machine,’ driven by multiple tailwinds (most prominently AWS, which posted an over 30% operating margin for the first even so),” Loop Capital’s Anthony Chukumba said in a note announced on Thursday.
In a prepared statement, Amazon CEO Jeff Bezos highlighted the increase of Amazon Business, its marketplace for business customers.
“Amazon Business has now reached a $10 billion annual white sales run rate and is serving millions of private and public-sector organizations in eight woods,” Bezos said in a statement.
Amazon’s quarterly report comes in the thick of a broader market sell-off that saw other tech stocks get hammered in late weeks. Amazon stock is up roughly 49 percent this year.
See: Gene Munster reacts to tech earnings