Amazon rebounds 6% in after-hours trading after beating Q3 2024 earnings estimates 📈

Amazon has just released its Q3 2024 earnings report. Analysts projected the net sales of $157.29 bn, earnings per share of $1.16 and Amazon Web Services revenue reaching $27.49 bn. The company managed to beat the sales and EPS expectations, with the AWS segment falling slightly short of analysts’ estimates. Net sales increased 11% YoY to $158.88 bn, surpassing the upper bound of the company's initial outlook ($158.88 bn). Earnings per share rose to $1.43, thus jumping 52% compared to the analogous period in 2023 ($0.94). AWS segment net sales rose to $27.45 mn, marking a second consecutive quarter of 19% growth. Operating profit reached $17.4 bn (est.: $14.76 bn). Amazon’s stock rebounds 6% in after-hours trading, living up to the implied, post-earnings 1D change.

The estimates for Amazon’s core cloud business suggested a slightly bigger expansion, with net sales expectations of $27.49 mn (+19.15% YoY). However, the minor pitfall didn’t drag on investors’ sentiment in a similar vein as Azure Cloud underperformance did on Microsoft’s stock. The operating income in the AWS segment rose significantly to $10.4 bn ($7 bn previously), indicating improving rentability of Amazon's product, which ultimately relieves the elevated worry around the cloud computing sector. Q3 has seen several improvements and new steps in the development of AWS. For example, Amazon entered into a strategic partnership with Databrick aiming to develop custom AWS-based models, improving price-performance for customers during the development of demanding AI applications. Further details on the future of AWS and its AI capabilities will be discussed during AWS re:Invent event after Thanksgiving.

When it comes to sales and advertising, the performance in the segment doesn’t deviate from the positive undertone of Amazon's earnings report. Online sales revenue rose by 7% YoY to $61.4 bn, surpassing the estimates by 3%. This is mostly due to record sales from July’s the Prime Day sale, which ended up as the biggest and the most successful to date. Amazon’s ad segment generated $14.3 bn, again outperforming analysts’ expectations. Prime subscription services don’t slow down either, with revenue rising 11% up to $11.2 bn.

All in all, Amazon has revealed robust results, proving strength in all of the segments the company operates in. AWS’ performance, though not exceeding the initial estimates, has contented the investors at the moment of the report release, which is reflected in after-hours stock movement. The company is also projecting a stable growth for the fourth quarter of 2024, with net sales expected to grow between 7% and 11%.