Amazon stock jumps on Q3 earnings, guidance

Amazon (AMZN) reported third quarter results that topped Wall Street estimates on both the top and bottom lines. The company posted earnings of $1.43 per share compared to a Bloomberg consensus estimate of $1.16. Net sales were $158.9 billion versus the expected $157.29 billion. AWS revenue net sales were $27.45 billion compared to a $27.49 billion estimate.

For Q4, Amazon sees net sales in a range of $181.5 billion to $188.5 billion. Wall Street was expecting $186.36 billion. It sees operating income in a range of $16.0 billion to $20.0 billion versus the estimated $17.49 billion.

Yahoo Finance Senior Reporters Alexandra Canal, Jared Blikre, and Josh Schafer break down the tech giant's results in the video above.

To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.

This post was written by Stephanie Mikulich.

Video Transcript

Amazon earnings just crossing the wire and shares are higher on the back of a be on both the top and bottom lines here.

So both revenue and EPS coming in ahead of expectations.

Operating income also ahead of expectations.

Operating margins coming in at 11%.

The estimate there was for 9.3%.

Now for AWS, the cloud, uh, component of the business net sales hitting 27.45 billion.

The estimate was around 27.5 billion.

So roughly line a slight miss there for fourth quarter guidance.

They see net sales coming in between 181.5 billion to 188.5 billion.

Estimate was for 186.36 billion.

So we're seeing shares climb as much as 6% as that fourth quarter operating income.

It was at the mid point and topped estimates there.

So it seems to be guidance once again driving the stock higher.

And it's interesting because in the second quarter results we saw guidance drive the stock lower.

We're seeing the opposite is true today.

Yeah, what?

I'm really focusing in here on are the Oper operating margins.

Excuse me there, so you take Let's begin with the operating income.

17.41 billion.

That's up 56% year over year.

And that handily beats the estimate of 14.75 billion by about $3 billion.

Operating margin This has been a concern for investors 11% versus 7.8%.

1 year ago, the estimate was for 9.34%.

So, uh, North America looks like that was 5.9%.

That was a small beat international, 3.6% a much bigger beat than the estimated 1.23%.

So, at least on this one area, uh, things are looking a little bit better.

There are concerns about the consumer, So can they charge as much?

Uh, can they maintain their prices and, uh, also their margins here?

And I think the answer is a little bit of those concerns have dissipated.

Yeah, Jared Amazon stock.

Definitely seeing a nice pop here, Ali.

You pointed to that guidance and it seems like that seems to be the key thing.

Perhaps driving the stock right now, Net sales in that range of 181 to 188.

The one thing I'd point out there is that's quite a big range to some extent, right?

We're talking about large numbers here in the hundreds of billions of dollars, but that is a $7 billion range, Uh, Wall Street's forecast falling kind of right in the middle of that.

But other things to point out here that I think are standing out is just also another earnings beat from a big tech company, right?

This is now every single one of the mag Seven companies has had a earnings beat, so again reminder that that's not really necessarily what's been driving these stocks, but a trend we continue to see when we talk about S and P 500 earnings overall, to see beats from these mag seven companies.

Company after company after company, setting us up for 430 with Apple, right and look Amazon is this huge company, multiple components to the business, Andy Jasse in the earnings release.

He noted that as we get into the holiday season, they're excited about what's in store for customers.

They mentioned prime day those big deals, obviously a huge component of the company.

Also mentioned NFL Black Friday game.

Election Day coverage with Brian Williams on Prime Video.

We know Prime Video.

It has really stood out to me as someone who covers the media space.

They've heavily been investing in that business, investing in sports.

They just rolled out ads on the platform.

Advertising strength continued in the quarter.

So just another name like you said with With the Tech Giants and the other thing I point out here to remember yesterday a couple of these big tech stocks.

I believe Microsoft was positive right after it reported before reversing down.

We don't have a clear view looking at this release into what Amazon is planning to spend on a I right, if we're talking about that being one of the key things right now that is perhaps weighing on some of these big tech stocks.

There's not a clear cap X read here on what they're spending on A I.

That's usually something.

You get a little bit more detail once we get on that earnings call at five o'clock.

But I think that's gonna be another key part of this story, because it certainly seemed to be a big part of the story for its fellow big tech companies.