Amazon Beats Q3 Expectations but Misses on Cloud Revenue
Amazon (AMZN) reported its third quarter earnings on Thursday, exceeding expectations on net sales and EPS but falling short on its cloud revenue.
After-hours trading saw a 5% increase in Amazon shares, which later settled at a 3% gain.
Amazon’s cloud business, known as Amazon Web Services (AWS), slightly missed analysts’ net sales expectations, totaling $23.06 billion against Wall Street’s forecast of $23.13 billion.
However, there were positive aspects – AWS sales grew 12% YoY, and its operating income increased by approximately 29% to $7 billion compared to the previous year.
This week has displayed mixed cloud results, with Microsoft (MSFT) reporting better-than-expected growth in its Azure cloud business, while Alphabet’s (GOOG, GOOGL) cloud growth numbers fell short.
The scrutiny on AWS growth has been intense this year, with JPMorgan’s Doug Anmuth mentioning it has received the most attention from investors.
Key Earnings Figures
Here are the key numbers reported by Amazon, compared to analysts’ estimates:
- Net sales: $143.08 billion (actual) versus $141.56 billion (expected)
- AWS net sales: $23.06 billion (actual) versus $23.13 billion (expected)
- Earnings per share: $0.94 (actual) versus $0.58 (expected)
- Operating margin: 7.8% (actual) versus 5.46% (expected)
- Q4 net sales: $160-167 billion (actual) versus $166.57 billion (expected)
Analyst recommendations for Amazon currently stand at 63 Buys, two Holds, and zero Sells.
Amazon CEO Andy Jassy stated, “We had a strong third quarter as our cost to serve and speed of delivery in our stores business improved, our AWS growth stabilized, our advertising revenue grew robustly, and our overall operating income and free cash flow significantly increased.”
This is breaking news, check back for updates.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. @agarfinks LinkedIn.
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