Amazon.com Inc. on Thursday posted strong quarterly sales growth, allowing it to report a higher profit as it expands into more corners of consumer spending.
For the third quarter, profit rose 1.6% to $256 million from $252 million a year earlier. On a per-share basis, profit was unchanged at 52 cents, well above analysts' consensus estimate of 8 cents.
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Meanwhile, sales of $43.74 billion, up from $32.71 billion, were above Amazon's own forecast of $39.25 billion to $41.75 billion for the quarter and above analysts' expectations of $42.14 billion.
Shares of the company rose 7% to $1,041.50 in after-hours trading after finishing at $972.43 on Thursday. Shares are up 30% year-to-date.
The jump in revenue is just one measure of Amazon's scale. Marketing research firm eMarketer estimates that Amazon will command about 43.5% of total e-commerce sales this year, compared with 38.1% last year.
The third quarter is typically a period of heavy spending, as Amazon opens new warehouses to get them up and running in time for the holidays. Amazon also hired 50,000 workers over the period to fill open positions following an August job fair, a feat becoming more expensive as competition for labor increases in logistics hot spots.
The company's total number of employees increased to 541,900 from 382,400 in the second quarter.
That increase includes Whole Foods Market Inc.'s roughly 87,000 employees, who were added to Amazon's roster as the $13.5 billion acquisition closed in late August. Since taking over the brick-and-mortar grocer, Amazon has slashed some in-store prices and said it plans to add Prime membership benefits to the payment system to reward loyalty. It is also selling Whole Foods' private labels online.
Whole Foods added $21 million to operating income and $1.3 billion in sales. North American operating income fell 56% to $112 million.
The online retailer's bottom line was boosted by its Amazon Web Services cloud-computing division, which increased sales by 42% to $4.58 billion. The unit, which rents computing power to a variety of startups, government agencies and other corporations, has become a major factor in Amazon's recent streak of profitability.
Still, the division is facing tougher competition from both Microsoft Corp. and Alphabet Inc.'s Google, prompting some concerns about w hether the growth can continue at the current pace.
Amazon said it expects fourth-quarter operating income of $300 million to $1.65 billion on revenue of $56 billion to $60.5 billion. Analysts surveyed by Thomson Reuters expect $1.55 billion in operating income and $58.94 billion in revenue.
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(END) Dow Jones Newswires
October 26, 2017 16:46 ET (20:46 GMT)