Amazon posted third-quarter profit and revenue above Wall Street expectations, fueled by stronger retail sales, which lifted shares 5.7% after-hours. The company forecast a positive holiday season, with expectations for steady results driven by faster shipping and a focus on affordable items.
Amazon reported a 7% increase in retail sales for the quarter ending Sept. 30, reaching $61.41 billion. Chief Financial Officer Brian Olsavsky said that, despite prior concerns over cautious consumer spending, improvements in operating margins contributed to the strong performance.
International operating margins rose to 3.6%, up from 0.9% the previous quarter, while North American margins increased to 5.9% from 5.6%. Amazon also reported a 19% revenue increase in Amazon Web Services (AWS) to $27.5 billion, marking the fastest growth in seven quarters, though competition remains strong from Microsoft Azure and Google Cloud.
CEO Andy Jassy emphasized Amazon’s commitment to advancing AI, describing it as a unique opportunity, with capital expenditures expected to rise. Meanwhile, advertising revenue grew by 19% to $14.3 billion, supported by targeted ads on Prime Video and in brick-and-mortar stores.
For the holiday quarter, Amazon projected revenue around $185 billion, close to analyst expectations of $186.16 billion. Total revenue for the third quarter was $158.9 billion, exceeding analyst forecasts, with net income rising to $15.3 billion, or $1.43 per share, compared to $1.14 expected.
Amid growth, Amazon announced it would end its long-standing CFO media calls and plans to implement a new five-day office work policy in January, drawing some employee pushback.
