Amazon Tops Wall Street Estimates: Q3 Net Profits Reach $256 Million

Amazon Tops Wall Street Estimates: Q3 Net Profits Reach $256 Million

The surge comes as the Seattle-based company announced its third-quarter earnings, blowing Wall Street's expectations out of the water and causing its stock to leap 7.7%, to $1,045 per share in after-hours trading.

Revenues for the quarter were $43.7bn (£33.4bn), up from $32.7bn in Q3 2016.

Amazon's net income for the quarter was $256 million, up from $252 million in the year-ago quarter. This guidance includes approximately 1,000 basis points of impact to its year-over-year growth rate from Whole Foods Market. Management had guided for third-quarter operating income to be between a loss of $400 million and a gain of $300 million.

The company's revenue guidance for the quarter topped out at $41.75 billion.

While there has been a massive rush to create 3rd party skills for the Amazon Echo, most have either been toy applications of extensions of other services, because until recently there was no way for applications to pay for themselves. Looking ahead, we excited about the possibilities for the Whole Foods business and believe that over the medium to longer term Amazon will make some more radical changes that will deliver stronger results. Operating income from e-commerce sales in North America was $112 million.

Amazon's third-quarter revenue increased 34% year over year.

The company said it expected between $56 and $60.5 billion of sales in the fourth quarter, which is always the company's biggest. Along with AWS, Business Prime Shipping gives Amazon another service offering for the growing B2B e-Commerce market.

Amazon has begun charging for Alexa skills, as the online retailer looks to monetize the apps used by its Echo smart speakers.

"And it's working - customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 5-star reviews, and active customers are up more than five times since the same time past year". Plus, content and technology at Amazon continue to evolve, and several analysts noted the company's growth (and potential growth) via its connected devices and voice assistance. However, initial signs are encouraging, and our data show some very slight movements on price perception - these are not dramatic, but they are a step in the right direction and show that Amazon's approach is being noticed by consumers.

Amazon's early Whole Foods initiatives included price reductions, selling whole Foods products on and installing Amazon Lockers at Whole Foods locations to drive foot traffic.

Operating profit dropped in all three major segments, by 40 percent in total to $347 million, as operating expenses grew 45 percent from a year ago.

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