After the market closed today, Amazon (NASDAQ:AMZN) reported better-than-expected third-quarter results, sending shares up as high as 8% in after-market trading hours on top of a 2% gain during market hours.
On average, analysts were expecting Amazon to post a loss of $0.09 per share, and revenue of $16.8 billion. While Amazon matched EPS expectations, sales came in higher than expected. Amazon posted revenue of $17.09 billion, up 24% from the year-ago quarter. Excluding $332 million in unfavorable year-over-year changes in foreign exchange rates, however, net sales rose 26% from the year-ago quarter. With expectations for year-over-year sales growth of just 21%, Amazon's better-than-expected revenue is likely the primary driver behind the market's apparent approval; in an earnings preview earlier this week, I indicated that sales would likely take center stage when the company reported results.
Profitability still looks a ways out for Amazon. Though sales have soared, operating expenses have soared just as rapidly. In the year-ago quarter, operating expenses were $13.834 billion, erasing any possible profit from its $13.806 billion in sales. Similarly, this quarter's operating expenses of $17.117 billion surpassed its total sales of $17.092 billion.
Revenue continues to be the story at Amazon, and the online commerce giant certainly proved today that its growth is far from over.
Investors can get further details by listening to the company's third-quarter conference call, which started at 2:00 PM Pacific Time. You can listen to a replay here. In the call, look for updates on other hot topics, particularly Amazon Instant Video and AmazonFresh.