Strong earnings reports from big technology companies propelled the market higher Friday, with the tech-heavy Nasdaq Composite (NASDAQINDEX:^IXIC) closing at a new record high along with the S&P 500 (SNPINDEX:^GSPC), and the Dow Jones Industrial Average (DJINDICES:^DJI) posting a gain as well.
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Technology stocks weren't the only ones that took off. Oil companies surged as the price of crude rose and a report was released showing an increase in the U.S. oil drilling rig count; the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) jumped 3%.
Amazon soars on another fine quarter
Online retail giant Amazon announced third-quarter results that beat expectations, and the market sent its shares soaring 13.2% to an all-time high. Revenue growth accelerated, growing 34% to $43.7 billion, beating last quarter's 25% growth and surpassing the analysts' consensus forecast of $42.2 billion. Excluding sales from Whole Foods, revenue was still up 29%.
Net income was $256 million, roughly flat compared to Q3 last year, but at the high end of the range of prior guidance, which was for between a loss of $400 million and a gain of $300 million. Earnings per share were $0.52 when analysts were expecting $0.03 per share.
Operating income from Amazon Web Services (AWS) burst through the $1 billion mark to $1.17 billion, up 28% from just last quarter. The company also broke out the contribution from its Whole Foods acquisition, which closed on Aug. 28. Sales after a little over a month were $1.3 billion, and the business chipped in $21 million of operating income.
Looking ahead to the fourth quarter, Amazon expects sales to grow between 28% and 38% year over year, with 10 percentage points of that being contributed by Whole Foods. Operating income is expected to be between $300 million and $1.65 billion, compared with $1.3 billion last year.
The market's expectations for Amazon's growth were already quite high, but the company managed to beat them once again. When questioned about what was behind the strong results, management pointed to a successful Prime Day and record sign-ups for free trials of Prime in international markets.
First Solar generates huge bookings
The sun shone on the stock of First Solar Friday: Shares gained 20% after the company reported third-quarter results that absolutely crushed expectations. Sales were $1.1 billion, up 60% from the period a year before and above the $872 million analysts were expecting. Earnings per share were $1.95, more than double the $0.84 per share that Wall Street was expecting.
First Solar's results vary widely quarter to quarter because of the timing of sales of large projects. The sales increase in the third quarter was primarily due to the sale of its California Flats and Cuyama projects, but the company had record order bookings as well. The company booked a net 4.5 gigawatts (GW) of power-generating capacity, bringing the total year-to-date to 6.0GW. Its total backlog now stands at 7.4GW, compared to 2.1GW shipped year to date.
That boom from project sales won't be repeated in Q4, but the company hiked its non-GAAP EPS guidance for the year to a range of $2.40 to $2.60 due to improved margins. First Solar is also benefiting from the Trump administration's threat to impose tariffs on certain types of imported solar panels, as customers rush to lock in today's prices.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jim Crumly owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.