On August 3, after U.S. market close, Amazon announced its second-quarter earnings. The online retailer's Q2 revenue and Q3 guidance both exceeded market expectations.
According to the report, Amazon's net sales for Q2 increased by 11% year-over-year, amounting to $134.38 billion. This performance outpaced the expected market forecast of $131.63 billion, excluding the $300 million loss due to foreign exchange rates.
Segment-wise, North American business revenue also saw a year-over-year rise of 11%, hitting $82.55 billion and beating the anticipated market forecast of $79.68 billion. Meanwhile, international business revenue increased by 10% to reach $29.7 billion. Amazon Web Services (AWS) revenue grew 12% year-over-year, reaching $22.14 billion and surpassing the market prediction of $21.71 billion.
In another way of breaking down the earnings, Q2 revenue from Amazon's online stores was $52.97 billion, surpassing the expected $52.45 billion. Revenue from physical stores was slightly above the market's expectation of $4.96 billion at $5.02 billion. Subscription services brought in $9.89 billion, slightly above the anticipated $9.79 billion.
For the second quarter, Amazon's operating profit was $7.68 billion, far exceeding the market forecast of $4.72 billion. The operating profit margin for the quarter was 5.7%, higher than the market's average expectation of 3.46%.
In terms of specific segments, the operating profit for the North American business in Q2 was $3.21 billion, compared to an operating loss of $630 million in the same quarter last year. The international business saw an operating loss of $900 million, significantly narrowed from the operating loss of $1.77 billion in the same period last year. The operating profit of AWS was $5.37 billion, slightly narrowed compared to $5.72 billion in the same period last year.
Looking ahead, Amazon is forecasting Q3 net sales of $138-143 billion, slightly exceeding the analyst prediction of $138.3 billion. Operating income for the third quarter is expected to be between $5.5 billion and $8.5 billion, above the analyst estimate of $5.41 billion.
In the aftermath, Amazon's stock surged by 7.75% in after-hours trading.
