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Amazon Reports Strong Q3 Earnings: AWS Income Closes In On North America Retail Business

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The e-commerce giant beat analyst expectations in large part due to its thriving cloud services business.


Amazon’s stock price surged after hours Thursday after the company released a strong earnings report for Q3 2015 that beat analyst estimates.
Net sales increased 23 percent year over year to $25.4 billion in Q3. That compares to the 20 percent increase in sales the company reported in Q2 2015. Net income was $79 million in Q3, compared to a quarterly net loss of $437 million a year ago. Analysts had anticipated a loss per share of $0.13; instead the company reported $0.17 revenue per share.
Among the highlights Amazon pointed to was the that the Fire has been the top-selling product on Amazon.com since the $50 tablet launched; the Amazon Dash Button now allows users to reorder over 500 common household products from 29 brands with the touch of a button; and the launch of the Etsy challenger, Handmade at Amazon, earlier this month.
The company also called out its growth in India, claiming to continue to hold its position as India’s largest store, with over 30 million products and adding an average of 40,000 products per day so far this year. International retail business continued to operate at a loss, however. Net sales increased three percent year over year, and the division reported a net loss of $56 million on $8.2 billion in revenue.
The North America retail business saw net sales increase 26 percent to a net profit of $528 million on $15 billion in revenue.
It was Amazon’s cloud services business that again grabbed Wall Street’s attention this quarter. Amazon Web Services reported $2.1 billion in revenue, with a profit of $521 million — that’s an increase of 81 percent in sales and more than 400 percent in profit year over year,  just shy of the company’s e-commerce profit in North America. AWS now makes up seven percent of the company’s net sales.
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