Amazon.com Inc. announced Thursday, Oct. 25 sales increase by nearly 30 percent to $56.6 billion in the third quarter ended Sept. 30. The tech giant also posted a record $2.9 billion in profit, achieving four consecutive quarters in which profits reached $1 billion.
Amazon CFO Brian Olsavsky said the increase in profits was driven by the company's two major units, the Amazon Web Services, and Amazon's nascent advertising business.
As noted by CNBC, Amazon reported $2.5 billion in sales under a category identified as "Other". This figure reflected a 122 percent increase year over year, growing by $301 million from last quarter. Based on these figures, CNBC estimated that Amazon advertising business is on its way to achieving $10 billion in sales yearly. If Amazon sustains this performance, it could surpass Google and Facebook which would strike as ironic since both companies are well-established digital ad platforms.
Amazon also reported an increase in its operating cash flow of 57 percent to $26.6 billion compared with $17 billion in the same period in 2017.
Aside from a record $2.9 billion in net income this third quarter, the company also posted increase per diluted share to $5.75 compared to the diluted share of $0.52 with net income of $256 million in the third quarter of 2017.
Jeff Bezos, Amazon founder, and CEO, said Amazon Business has now achieved $10 billion annual sales run with millions of customers ranging from the private to the public sector in eight countries. He added that the business is set to expand, welcoming more clients from the educational institutions, local governments, and as much as 50 percent of the Fortune 100.
Despite a record profit for the quarter, Amazon still failed to meet sales forecast set by Wall Street analysts.
Amazon stock fell 9 percent in after-hours trading after the company reports its financial results. The company's stock closed 7 percent on Thursday, at $1,782.17 but dropped in after-hours trading to $1,668.01 per share.
Ahead of Amazon's third-quarter announcement, Wall Street estimated that Amazon would report revenue of about $6.7 billion. That would have been an increase as much as 45 percent compared the same period a year ago.
Analysts expected a record profit of about $2.13 billion, Bloomberg reported. Optimism on the stock was carried over after Amazon exceeded a market valuation of $1 trillion in September.
Elsewhere, technology stocks have been underperforming with the majority of analysts warning about market volatility that started to build up in October. Tech giants Netflix, Facebook, and Google have all posted a lackluster performance this month.
