Business

Amazon third-quarter net sales beat estimates as more people shop online

Amazon earned $6.3 billion in the just-ended third quarter, the most in its 26-year history

FILE PHOTO: The logo of Amazon is seen at the company logistics centre in Boves, France, November 5, 2019. REUTERS/Pascal Rossignol/File Photo
  • AWS revenue 29% to $11.6 billion, roughly in line with estimates;
  • Amazon said it expects net sales of $112 billion to $121 billion for the fourth quarter.

Amazon reported a record profit for the second quarter in a row and forecast a jump in holiday sales. As brick-and-mortar shops closed their doors due to the coronavirus pandemic, Amazon by contrast moved to recruit over 400,000 more workers and earned $6.3 billion in the just-ended third quarter, the most in its 26-year history.

Shares initially rose 2% in after-hours trading and then turned lower by 1% as the company forecast $4 billion in COVID-19 related costs for the current period and operating income below Wall Street’s expectations.

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For the third quarter, Amazon garnered sales of $96.1 billion, ahead of analysts’ average estimate of $92.7 billion, according to IBES data from Refinitiv.

Jeff Bezos, Amazon’s chief executive said in a press release, “We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season.”

Amazon Web Services (AWS) has traditionally been a bright spot. The cloud computing division has seen sales rise with demand for gaming and remote work. The unit increased revenue 29% to $11.6 billion, roughly in line with estimates.

READ ALSO: Shopify revenue beats estimates as online boom pulls in more merchants

The question for some analysts has been whether Amazon’s consumer division can keep up with still-growing purchases during a pandemic and peak holiday shopping season.

The company has long worked to avoid a repeat of the 2013 season when delays left some without presents on Christmas Day. Amazon now handles more deliveries in house, and this year it moved its marketing event Prime Day – usually in July – to October, letting customers place holiday orders early.

Amazon said it expects net sales of $112 billion to $121 billion for the fourth quarter. That would mark the company’s first over $100 billion and is ahead of analysts’ expectations of $112.3 billion.

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