Amazon Profit Tops Analysts’ Estimates on Cloud, Advertising

Amazon Profit Tops Analysts' Estimates on Cloud, Advertising Inc.’s dwarfed estimates for quarterly profit on Thursday and forecast operating income above Wall Street’s expectations for the third quarter, as the company earned far more from its higher-margin cloud business.

The company forecast operating income of between $1.4 billion and $2.4 billion for the third quarter, beating analysts estimate of $843 million.

Revenue from Amazon Web Services (AWS), the company’s fast-growing cloud services business, surged about 49 percent to $6.11 billion, beating an average estimate of $6 billion, according Thomson Reuters I/B/E/S.

Operating income for AWS rose 80 percent to $1.64 billion, powering profits for the entire company which were double expectations of $2.50 per share.

Amazon’s shares (AMZN) rose 4.3 percent in early after-hours trading. They had already risen 60 percent in 2018 so far.

Net sales in North America, its biggest market, jumped 43.8 percent to $32.17 billion in the reported quarter.

The Seattle-based company said total net sales rose 39 percent to $52.89 billion, missing the average analyst estimate of $53.40 billion.

Total operating expenses surged 33.7 percent to $49.90 billion as the company invested heavily in its Prime program, creating original video content and building its warehouse and delivery infrastructure.

Net income rose to $2.53 billion, or $5.07 per share, in the second quarter ended June 30 from $197 million, or 40 cents per share, a year earlier. 

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