Summits Yellow

Amazon stock skyrockets after strong earnings in Q3

Tim Maytom

Amazon’s stock jumped seven per cent in after-hours trading yesterday after it released its Q3 financial reports, showing a 34 per cent increase in revenues year-on-year and beating expectations, a much needed boost for the company after last quarter, when it missed Wall Street’s predictions and saw stocks drop as a result.

Revenues for the quarter were $43.7bn (£33.4bn), up from $32.7bn in Q3 2016. This figure includes $1.4bn from the recently-acquired Whole Foods Market, where Amazon has slashed several prices in an effort to undercut rivals and expand its presence in the physical grocery space. Net profit stayed relatively consistent, increasing from $252m in Q3 2016 to $256, which stays in line with Amazon’s habit of reinvesting much of its revenue into expansion and new ventures.

AWS, Amazon’s enterprise-facing cloud computing unit, brought in $4.6bn in revenues, up 34 per cent year-on-year, a positive sign given Wall Street’s concerns over slowing growth for this part of the business. CEO and founder Jeff Bezos was also keen to trumpet the success of Amazon’s hardware division and its Alexa digital assistant.

“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,” said Bezos. “Because Alex’s brain is in the AWS cloud, her new abilities are available to all Echo customers, not just those who buy a new device.

“And it’s working – customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 5-star reviews, and active customers are up more than five times since the same time last year. With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better.”

With holiday season shopping revenues to look forward to in Q4, Amazon is no doubt very happy with these results, and is predicting growth of between 28 and 38 per cent for the final quarter of the year.