In the third quarter ended September 30, net sales at Amazon rose 23.2%, to $25.4 billion, and net income was $79 million, compared to a net loss of $437 million in the same period a year earlier.
Because analysts had predicted a loss and because revenue was $500 million more than expected, Amazon shares rose almost 10%, to $617 a share, in after-market trading.
As the New York Times wrote, while revenues have "grown strongly and consistently" in the past several years at Amazon, "profits have often been minimal or nonexistent as the company has kept investing, building over 100 fulfillment centers around the world, pouring money in sectors as disparate as India and video, and expanding its cloud computing division, Amazon Web Services." Thus, the positive reaction to yesterday's news.
The web services division is a major factor in Amazon's strong performance: its sales rose 79%, to $2.09 billion, and its operating income was $521 million. Without this fast-growing cloud storage operation, "Amazon's results might have dismayed investors instead of thrilling them," the Times said.
Amazon predicted that sales in the fourth quarter--the holiday season--will rise 14%-25% over the same period last year.
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Amazon's Prime Now one-hour delivery service has expanded to San Antonio, Tex., as well as California's Bay Area. Most San Francisco and San Jose neighborhoods are included, with more areas in Palo Alto and throughout Silicon Valley expected to be added soon. Prime Now operates in 17 metropolitan areas worldwide.
In addition, Amazon's list of cities qualifying for Prime Free Same-Day Delivery on qualifying orders over $35 now includes Orlando, Fla., Chicago, Northern New Jersey and new ZIP codes in New York City and Philadelphia.