Amazon earnings: Beats estimates on sales, but misses target for cloud

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Alexandra Garfinkle

Amazon (AMZN) reported its third quarter earnings on Thursday, beating expectations on net sales and EPS, but missing on its cloud revenue.

Amazon shares climbed by as much as 5% in after-hours trading, before falling back down to gains of about 3%.

Amazon’s cloud business, Amazon Web Services or AWS, fell slightly short on analysts’ net sales expectations, coming in at $23.06 billion, against the $23.13 billion Wall Street expected.

However, there were some silver linings, as AWS sales were up 12% year over year and the division’s operating income is also on the upswing, coming in at $7 billion, a roughly 29% increase from last year.

It’s been a week of mixed cloud results. On Tuesday, Microsoft (MSFT) reported better-than-anticipated growth in its Azure cloud business, while Alphabet’s (GOOG, GOOGL) cloud growth numbers disappointed.

AWS growth has been under a microscope this year, and it’s a subject that’s been “getting the most airtime with investors,” JPMorgan’s Doug Anmuth wrote before earnings.

The earnings rundown

Here are the key numbers that Amazon reported, as compared to analysts’ estimates compiled by Bloomberg:

Net sales: $143.08 billion actual, versus $141.56 billion expected

AWS net sales: $23.06 billion actual, versus $23.13 billion expected

Earnings per share: $0.94 actual, versus $0.58 expected

Operating margin: 7.8% actual, versus 5.46% expected

Q4 net sales: $160-167 billion actual, versus $166.57 billion expected

Currently, analyst recommendations for Amazon come out to 63 Buys, two Holds, and zero Sells.

“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Amazon CEO Andy Jassy in a statement.

This is breaking news, check back for updates.

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on X, formerly Twitter, at @agarfinks and on LinkedIn..

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