Date
12 December 2017
Amazon Web Services (AWS), Amazon's most profitable unit, posted nearly 42 percent jump in sales in the third quarter. Photo: Reuters
Amazon Web Services (AWS), Amazon's most profitable unit, posted nearly 42 percent jump in sales in the third quarter. Photo: Reuters

Amazon 3Q results beat forecasts; shares surge

Amazon.com reported on Thursday a 34 percent surge in revenue for the third quarter, topping market expectations, helped in part by its acquisition of grocery chain Whole Foods Market and strong sales during “Prime Day” promotions.

The world’s largest online retailer said sales rose to US$43.7 billion for the three months ended September, helping the firm reap net income of US$256 million for the period, also beating forecasts.

Prime Day, a summer marketing event Amazon has created to replicate the shopping frenzy that is more typical of the winter holiday season, helped boost sales.

The event fared better this year internationally than last year, Reuters quoted Amazon’s chief financial officer, Brian Olsavsky, as saying on a call with reporters.

Revenue, meanwhile, included US$1.3 billion contribution from Whole Foods, the upscale grocer which Amazon acquired for US$13.7 billion in August. 

In a first, Amazon broke out sales for its online retail business and for its physical bookstores and Whole Foods locations.

Revenue from its online stores jumped 22 percent to US$26.4 billion, the fastest growth Amazon has seen in the segment in more than a year, Reuters noted.

Key to its success has been signing more people up for Amazon Prime, its fast-shipping and video-streaming club, whose members tend to buy more from the company.

Revenue from subscription fees such as Prime showed unusually strong growth of 59 percent, to US$2.4 billion.

And Amazon Web Services (AWS), the company’s most profitable unit, which handles data and computing for large enterprises, posted a 41.9 percent rise in sales to US$4.58 billion, the report said.

Following the strong quarterly report, which was unveiled after US market close, Amazon’s shares spiked 8 percent in after-hours trading to stand above the US$1,050 level. 

Prior to the latest rally, the stock was already up about 30 percent in year to date.

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CG/RC

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