While traders were enthralled with the Amazon.com Inc. (NASDAQ: AMZN) move into the pharmacy business, the huge e-commerce and cloud company showed it has more worlds to conquer. However, it is the core business that will drive earnings between now and the end of the year. Analysts who cover overall online shopping think that it could represent almost a third of holiday purchases.
Amazon’s shares reached an all-time high recently and have risen 70% this year, against an advance of 12% by the S&P 500. Its market cap is about $1.57 trillion.
Amazon’s revenue in the fourth quarter should surge above the third, particularly in its core North America e-commerce segment. Overall revenue in the third quarter was $96.1 billion. North America e-commerce was $59.3 billion of that. Amazon’s total operating income for the quarter was $6.2 billion, of which $2.3 billion was from North America e-commerce.
Unfortunately, much the holiday increase will be because the pandemic will keep people out of stores. That, combined with convenience, will have a trampoline effect on revenue.
Amazon’s forecast for the fourth quarter appears to be light, and therefore, easily beaten. Management put the range at $112 billion and $121 billion, up about 30% from last year’s number for the same period.
Watch for Amazon to blow above that number.