Amazon’s stock rose by 6.89% to $199.24 following a strong quarterly earnings report, particularly bolstered by its cloud division, AWS. The company reported a net income of $15.3 billion, surpassing expectations versus $9.9 billion the previous year. Operational results were also robust, climbing from $11.2 billion to $17.4 billion. Amazon anticipates its operational income for the current quarter will range from $16 billion to $20 billion, indicating continued growth and strong sales forecasts.
(AOF) – Amazon’s stock rose by 6.89% to $199.24, making it one of the top performers in the S&P 500 following a strong quarterly report. The company’s results, especially those from its cloud division, AWS, not only exceeded expectations but also presented positive future prospects. According to JPMorgan, “Amazon’s overall operating margin of 11% is the highest the company has ever recorded.” They attribute the strong performance to Amazon’s international success and AWS’s contributions.
In the third quarter, the online retailer reported a net profit of $15.3 billion, equivalent to $1.43 per share, up from $9.9 billion or 94 cents per share from the previous year. The market consensus was only $1.14. Operating income surged from $11.2 billion to $17.4 billion, surpassing the consensus of $14.7 billion by a wide margin.
Amazon’s sales jumped 11% to $158.9 billion, while Wall Street had predicted $157.20 billion.
“Similar to other major internet players, Amazon is also managing its workforce and, consequently, its operating expense growth—while the overall year-over-year increase stands at 3%, this accounts for ongoing hiring to fulfill orders, and management revealed during the earnings call that office staff actually decreased year-over-year,” noted UBS.
AWS saw its operating income soar by nearly 49.75% to $10.45 billion, with revenues increasing by 19% to $27.5 billion. The market had anticipated a profit of $9.12 billion.
Optimistic Operational Profit Targets
For the current quarter, operating income is projected to be between $16 billion and $20 billion, compared to $13.2 billion a year prior. The market aims for a figure of $17.5 billion.
“Although past performance is not necessarily indicative of future results, it is worth noting that we have seen seven consecutive quarters where the upper limit of the operating profit forecasts has been exceeded,” UBS reminded. “The disappointing median forecast from the previous quarter being 14% below consensus gives us a current result exceeding the top of the forecast range by 16%.
Amazon’s net sales are expected to be between $181.5 and $188.5 billion, indicating growth of 7% to 11%. Wall Street is targeting revenue of $186.4 billion.
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