From Seattle's own GeekWire!!! (and the crowd is going crazy)
First up, yesterday's expectations:
Amazon earnings preview: Investors watching 1-day shipping costs, AWS, and regulatory scrutiny
And the results:
Amazon shares fall 8% after missing profit expectations again; $70B in Q3 revenue up 24%
Shares of Amazon fell more than 8 percent in after-hours trading after the company missed profit expectations for the second straight quarter. The Seattle tech giant is spending heavily on increasing delivery capacity as it shifts from two- to one-day shipping as a core Amazon Prime benefit.
“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” Amazon CEO Jeff Bezos said in a statement. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”Some of the details:
On a call with reporters, Amazon CFO Brian Olsavsky said that he expects costs from the 1-day initiative to reach around $1.5 billion in the fourth quarter — that’s nearly double the $800 million spent in Q2.
Charlie O’Shea, an Amazon analyst with Moody’s, said that “we continue with our view that Amazon’s robust liquidity, with over $42 billion in cash and short-term investments, as well as AWS’ steady $2.3+ billion in operating income per quarter, provides the company with significant runway to continue with its myriad, necessary investments.”
Revenue: Amazon posted $70 billion in revenue, up 24 percent from the year-ago quarter. Analysts expected $68.8 billion. This quarter included Prime Day, Amazon’s big shopping extravaganza.
Profit: Amazon reported earnings per share of $4.23, missing expectations of $4.62, and down from $5.75 last year. Operating income of $3.2 billion was just above the company’s projections....MORE
Amazon will spend nearly $1.5B in Q4 for one-day delivery initiative as shipping costs skyrocket
Amazon is spending massively to increase capacity for its new one-day delivery initiative — and it’s cutting into the company’s profits.And:
The company revealed Thursday that it will invest nearly $1.5 billion in the fourth quarter alone for its one-day shipping initiative, which is replacing the traditional 2-day core Amazon Prime membership benefit. That’s nearly double what Amazon spent in the second quarter, when it announced the expansion....MORE
Amazon Web Services approaches $9B in quarterly revenue, but growth slows again, missing analyst expectations
...MORE
And:
Amazon tops 750,000 employees for the first time, adding nearly 100,000 people in three months
