Canada markets closed

Amazon second-quarter earnings beat expectations, shares jump

JP Mangalindan
Chief Tech Correspondent

Amazon (AMZN) reported better-than-expected earnings on Thursday afternoon, a day after Facebook’s (FB) lackluster second-quarter earnings report led to a historic sell-off.

The Seattle tech giant on Thursday reported earnings-per-share of $5.07, higher than analysts’ expectations of $2.49 per share. Net sales for Amazon Web Services, or AWS, climbed to $6.1 billion, which is up from $4.1 billion during the same period in 2017.

While Amazon’s sales of $52.9 billion missed analysts’ expectations of $53.35 billion, its stock was still up nearly 4% in after-hours trading Thursday.

FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City,U.S., January 29, 2016. REUTERS/Mike Segar/File Photo

The company’s earnings beat mitigates some of the bad press it received on Thursday. The American Civil Liberties Union alleged that Amazon’s facial-recognition technology was so flawed that it incorrectly matched 28 lawmakers with pictures of people who had been arrested.

During Amazon’s earnings call on Thursday, look for tech company to announce more milestones from this year’s 36-hour Prime Day, which the company says helped sign more Prime members in one day than any other day in the company’s history. And despite site-wide problems during the first few hours of Prime Day, Amazon says small- and medium-size businesses generated $1 billion in sales during the first 25 hours or so of the annual sales event.   

Looking ahead, Credit Suisse sees huge potential upside for Amazon in several newer verticals the company has doubled-down on in more recent years.

“The largest category opportunities that still lie ahead for Amazon remain those that are non-homogeneous and require greater service level and handling – namely groceries, home improvement/furniture and apparel, which are 3%, 4% and 20% online penetrated, with $846 billion, $392 billion and $300 billion in dollars remaining offline in the U.S.,” Credit Suisse analyst Stephen Ju wrote in a report published last week.

JP Mangalindan is the Chief Tech Correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to Follow him on Twitter or Facebook.

More from JP: