The third quarter saw Amazon blow by financial expectations and finish with almost $10 billion in profits.
Net income increased to $9.88 billion in the third quarter, or 94 cents per diluted share, versus $2.87 billion, or 28 cents per diluted share, in the year-before period.
Third quarter net income included a pre-tax valuation gain of $1.2 billion included in non-operating income as an expense from the common stock investment in Rivian Automotive, versus a pre-tax valuation gain of $1.1 billion from the investment in the year-prior period, Amazon stated.
An analyst consensus estimate published by Yahoo Finance forecast earnings per diluted share of 55 cents and revenues of $133.39 billion.
Net sales increased 13% to $143.1 billion from the year-earlier quarter. With the $1.4 billion favorable impact from year-over-year changes in foreign exchange rates throughout the period excluded, net sales increased 11% compared with the third quarter of 2022, the company reported. Product sales increased to $63.17 billion from $59.34 billion in the year-past period. Operating income increased to $11.19 billion versus $2.53 billion in the 2022 quarter.
North America segment sales gained 11% year-over-year to $87.89 billion, while international segment sales increased 16% year-over-year to $32.14 billion, or 11% excluding changes in foreign exchange rates. North American segment operating income came in at $4.31 billion compared with an operating loss of $412 million in the year-past period, and the International segment operating loss came in at $95 million versus an operating loss of $2.47 billion in the 2022 quarter.
In the business-to-business AWS segment, sales advanced 12% year-over-year to $23.06 billion with an operating income of $6.98 billion versus an operating income of $5.4 billion in the year-previous quarter.
Among the highlights of the third quarter, according to Amazon:
- The company sold hundreds of millions of items worldwide during Prime Big Deal Days, Amazon’s largest two-day October holiday kick-off event. On the first day of the event, Prime members in the United States purchased more than 25 million items with same-day or next-day Delivery, with hundreds of thousands of items delivered within four hours of purchase.
- Launched product review highlights, a new generative AI–powered feature that lets shoppers in Amazon’s U.S. store quickly determine what other customers say about a product before reading through andy detailed reviews.
- Announced that Amazon will hire 250,000 full-time, part-time, and seasonal employees in the U.S. this holiday season.
- Amazon also announced its largest-ever annual investment in U.S. hourly employee pay, at $1.3 billion, bringing the new average hourly wage for customer fulfillment and delivery roles to more than $20.50 per hour.
- Announced new Buy with Prime features to help merchants grow business on their own websites, such as the ability to integrate Buy with Prime and Shopify.
- Introduced generative AI capabilities to help sellers create product listings.
In announcing financial results, Andy Jassy, Amazon CEO, said, “We had a strong third quarter as our cost to serve and speed of delivery in our stores business took another step forward, our AWS growth continued to stabilize, our advertising revenue grew robustly, and overall operating income and free cash flow rose significantly. The benefits of moving from a single national fulfillment network in the U.S. to eight distinct regions are exceeding our optimistic expectations and, perhaps most importantly, putting us on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history.
Jassy continued, “The AWS team continues to innovate and deliver at a rapid clip, particularly in generative AI, where the combination of our custom AI chips, Amazon Bedrock being the easiest and most flexible way to build and deploy generative AI applications, and our coding companion, CodeWhisperer, allowing enterprises to have the equivalent of an experienced engineer who understands all of their proprietary code is driving momentum with customers, including Adidas, Booking.com, GoDaddy, LexisNexis, Merck, Royal Philips and United Airlines, all of whom are starting to run generative AI workloads on AWS.”
