Is Amazon Growing Fast Enough for Investors?

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Amazon.com Inc. (NASDAQ: AMZN) released third-quarter financial results after markets closed Thursday. The e-commerce empire said that it had $4.23 in earnings per share (EPS) and $69.98 billion in revenue, compared with consensus estimates that called for $4.62 in EPS and $68.81 billion in revenue. The same period of last year reportedly had $5.75 in EPS and $56.58 billion in revenue.

During the most recent quarter, Amazon Web Services (AWS) revenues increased 34.7% to $8.995 billion, up from $6.68 billion in the same period of last year, with operating income of $2.26 billion.

In terms of its other segments Amazon reported:

  • North American net sales increased 24% to $42.64 billion, with operating income of $1.28 billion.
  • International sales increased 18% to $18.35 billion, with an operating loss of $386 million.

As for guidance, the company expects to see net sales in the range of $80.0 billion to $86.5 billion, with operating income of $1.2 billion to $2.9 billion in the fourth quarter. The consensus estimates call for $6.49 in EPS on $87.37 billion in revenue for the quarter.

Jeff Bezos, Amazon founder and CEO, commented:

We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery. Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes.

Shares of Amazon closed Thursday at $1,780.78, in a 52-week range of $1,307.00 to $2,035.80. The consensus price target is $2,302.13. Following the announcement, the stock was down about 7% at $1,659.78 in the after-hours session.

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