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Amazon Surprises with Big Q3 Beat, Also GOOGL, MSFT, INTC

Amazon.com AMZN, not typically known for blowing away quarterly earnings estimates, posted a big earnings beat in its Q3 earnings report after the bell today. From expectations of just $0.01 per share, Amazon put up 52 cents per share, exactly meeting its year-ago earnings total. Revenues of $43.74 billion outperformed the $42.18 billion in the Zacks consensus.

The company's acquisition of Whole Foods in the quarter (August 28) brought a positive impact of 1000 basis points (10%) to Amazon's results. Amazon Web Services (AWS) posted 42% net sales growth year over year, with operating income in the quarter of $2977 million. Operating cash flow rose 14% to $17.1 billion in Amazon's Q3 2017.

This is only the third bottom-line beat for Amazon in the past five quarters. Generally, huge investments into new markets soak up all of Amazon's quarterly profits, while investors focus mostly on the enormous and widening revenue streams. The Whole Foods turnaround looks to be accretive to Amazon's gains at an earlier point than most of Amazon's new businesses.

Guidance for Q4 display very wide ranges for both net sales ($56.0-60.5 billion, 28-38%) and operating income ($300 million - $1.6 billion). Even still these numbers look a tad conservative, with the pre-report Zacks consensus revenue estimate at $58.93 billion. If Amazon posts another quarter like the one just reported, it could plausibly eviscerate those estimates.

Amazon shares are now trading up over 8% in the after-market today. Shares had already gone up 30% year to date, but had been down more than 7% since the company's rather disappointing Q2 earnings report. Amazon has now already made up for that shortfall, and then some. Prior to its earnings surprise, Amazon was a Zacks Rank #4 (Sell) stock, with a Zacks Style Score of B.

For the latest Alphabet GOOGL earnings report, click here.

For the latest Microsoft MSFT earnings report, click here.

For the latest Intel INTC earnings report, click here.


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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
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