Amazon’s third quarter revenue grew 37% and checked in at $96.1 billion with Amazon Web Services sales at $11.6 billion.
AWS delivered third quarter operating income of $3.53 billion compared to Amazon’s North America sales of $2.25 billion. Overall, Amazon reported net income of $6.3 billion, or $12.37 a share.
Wall Street was expecting Amazon to report third quarter sales of $56.4 billion with non-GAAP earnings of $7.41 a share.
Not surprisingly, Amazon raised its 2020 outlook. Amazon projected fourth quarter sales of $112 billion and $121 billion with operating income between $1 billion and $4.5 billion. Wall Street was only expecting fourth quarter sales of $70 billion.
In afterhours trading, Amazon shares waffled due to AWS sales growth of 29% from a year ago. That growth trailed Microsoft Azure’s 48%, but AWS has a much larger base of revenue.
Going into Amazon’s earnings report, analysts were concerned about whether the company’s sales growth was sustainable. Jefferies was expecting net sales growth of 32% in the third quarter. Prime Day will fall in the fourth quarter results.
Capacity will be a big issue, said Jefferies analyst Brent Thill. “The key for Amazon this holiday season will be whether these capacity expansions will be enough to handle an expected surge in demand/orders,” said Thill.
It has been a busy few months for Amazon. Recent Amazon headlines include:
