Amazon exceeded revenue and earnings expectations in the third quarter, reporting $158.9 billion in revenue and earnings per share of $1.43. Profits also increased to $15.3 billion, compared to $9.9 billion in the same period last year. This performance sent shares up 6% in after-hours trading, with Amazon stock rising more than 40% over the past year. Amazon Web Services, the cloud unit, generated $27.4 billion in revenue with $10.4 billion in operating income, contributing significantly to the company’s overall operating income of $17.4 billion in the third quarter.
Online store revenue for Amazon increased by 7% year-over-year to $61.4 billion, including sales from the annual Prime Day event in July. Amazon Web Services continued to drive profitability, with a 19% increase in revenue to $27.4 billion and a 50% increase in operating income to $10.4 billion. The company’s advertising revenue grew by 19% to reach $14.3 billion, while third-party seller services revenue increased by 10% to $37.8 billion.
Amazon spent $23.5 billion on shipping in the third quarter, an 8% increase, as it continues to enhance its logistics operations. Revenue from physical stores, which include Whole Foods and other Amazon grocery stores, rose by 5% to $5.2 billion. Amazon’s workforce has grown to 1.55 million employees, up 3% from the previous year, excluding seasonal and contract workers. The company plans to hire 250,000 employees in the U.S. by the 2024 holiday season and increase the ratio of individual contributors to managers in its corporate workforce.
Amazon Prime, including subscription services revenue, saw a revenue increase of 11% to $11.2 billion. Looking ahead, Amazon forecasts fourth quarter sales of $181.5 to $188.5 billion, with operating income expected to range between $16 billion and $20 billion. The company will face competition from other cloud computing giants, such as Google and Microsoft, who also reported strong results for their cloud units in the same period. Investors are closely monitoring the impact of AI adoption on these companies’ cloud businesses.
In summary, Amazon’s third quarter financial results exceeded expectations, with strong revenue growth across various segments of the business. The company continues to focus on expanding its workforce, investing in logistics and cloud computing, and driving revenue through advertising and third-party seller services. Looking ahead, Amazon remains confident in its growth trajectory and forecasts solid sales and operating income for the fourth quarter.
