Amazon's third-quarter earnings blew away Wall Street expectations Thursday, with sales hitting $96.1 billion --a record for any three-month period in the company's history and a 37% increase year-over-year.
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Spurred by people at home and online due to the coronavirus pandemic, the Seattle-based company easily zoomed by Wall Street's expectations of $92.7 billion, according to analysts surveyed by Refinitiv. For the same period last year, Amazon took in $70 billion.
With still another quarter left for the year, Amazon is on its way to mind-blowing numbers. It has already reached a record profit total in 2020 with another quarter still remaining. Those fourth-quarter figures will include the recent Prime Day sales as well as the upcoming winter holiday season
"We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season," Amazon CEO Jeff Bezos said in a statement. "Big thank you to our employees and selling partners around the world who’ve been busy getting ready to deliver for customers this holiday.”
The online retail giant posted net income of $6.3 billion in the third quarter, or $12.37 per share, compared to $2.1 billion, or $4.23 per share a year ago.
Meanwhile, Amazon's third-party seller services saw a 55% increase year-over-year. On Prime Day, third-party sales surpassed $3.5 billion, a nearly 60% year-over-year increase.
As for the company's cloud computing division, Amazon Web Services (AWS), revenue increased 29% year-over-year to $11.60 billion, roughly in line with estimates, as COVID-19 boosted demand for remote work and gaming. AWS generated $3.54 billion in operating income, up 56% and more than the $3.45 billion FactSet consensus. The segment had a 30.5% operating margin, compared with 31.1 percent in the second quarter.
Despite strong numbers in these areas, the company did see sales drop 10% in Amazon’s physical store unit, which includes Whole Foods Market.
Amazon, which increased its hiring efforts to meet demand fueled by the pandemic, noted that it recruited over 400,000 employees, increasing the company's total workforce by 50% year-over-year to 1.12 million full and part-time employees excluding contractors and temporary personnel.
Bezos cited Amazon’s minimum wage increase for the strong job creation and challenged other large employers to “make the jump to $15.”
About 100,000 of those new seasonal jobs are focused on Amazon Air, logistics, fulfillment centers, sortation centers, and global specialty fulfillment teams in the U.S. and Canada.
Going forward, the company forecasts fourth-quarter net sales between $112.0 billion and $121.0 billion, or an increase between 28% and 38% compared to a year ago. Operating income is expected to be between $1 billion and $4.5 billion, compared with $3.9 billion in fourth-quarter 2019, as the company expects approximately $4 billion in costs related to the pandemic.