Amazon.com, Inc. (NASDAQ: AMZN) reported its third quarter earnings for fiscal year 2017 and beat all expectations, sending shares over 11 percent shortly after open on Friday.
Amazon reported revenue of $43.7 billion, a massive 34 percent increase year over year, and surpassing Thomson Reuters analysts’ estimates of $42.1 billion. The company also reported an EPS of $0.52, staying flat year over year, but completely topping Thomson Reuters analysts’ estimates of $0.03 per share. Amazon’s web services reported revenue of $4.58 billion, also beating analysts’ estimates of $4.51 billion.
Revenue for the third quarter also includes $1.3 billion from Amazon’s acquisition of Whole Foods Market back in August. Excluding Whole Foods, Amazon still reported a 29 percent revenue growth year over year.
North American sales were $25.4 billion, up 34 percent year over year. International sales were $13.7 billion, up 29 percent year over year.
Retail growth contributed significantly to Amazon’s revenue, especially its Prime Day event that bolstered its international revenue, according to Amazon’s CFO, Brian Olsavsky.
Amazon’s Web Service is still its primary growth factor, as it has grown 42 percent year over year, and accounts for 11 percent of Amazon’s total revenue.
“In the last month alone, we’ve launched five new Alexa-enabled devices, introduced Alexa in India, announced integration with BMW, surpassed 25,000 skills, integrated Alexa with Sonos speakers, taught Alexa to distinguish between two voices, and more. Because Alexa’s brain is in the AWS cloud, her new abilities are available to all Echo customers, not just those who buy a new device,” said Jeff Bezos, Amazon founder and CEO.
Bezos also mentioned that Amazon has sold over tens of millions of Alexa-enabled products, and active customers are up more than five times since last year. The company is still working on expanding the Alexa interface and advancing its technology.
Amazon already offers a variety of services from its Amazon Books to Amazon Fresh to Amazon Business, and potentially even looking into health and pharmaceutical services.
The company diversified itself rapidly throughout the third quarter. The company is launching new services to change up the company. Amazon announced its own delivery system called “Seller Flex” to speed up shipping, Amazon partnering with Kohl’s to sell its Alexa products, and even a delivery service where the deliverer can deliver your products inside your own home to protect against theft.
For the fourth quarter, Amazon forecasts revenue to be between $56 billion and $60.5 billion, representing a 28 percent to 38 percent increase compared to the fourth quarter of 2016. The company also expects operating income to be in between $300 million and $1.65 billion, compared to $1.3 billion in the fourth quarter of 2016.