Amazon Earnings: Stock Climbs As E-Commerce Giant Beat Expectations

31 Oct 2024 by Lindsey Choo · Forbes

Topline

Shares of Amazon jumped more than 5% in after-hours trading Thursday after the e-commerce giant reported third-quarter earnings that beat Wall Street expectations.

An Amazon employee passes by its logo at a distribution center. (Photo by SEBASTIEN BOZON / AFP)AFP via Getty Images

Key Facts

Amazon reported $1.43 earnings per share and $158.9 billion in revenue, beating analyst expectations of $1.14 earnings per share and $157.2 billion in revenue, according to FactSet.

North American sales increased 9% year-over-year to $95.5 billion.

Amazon Web Services, the company’s cloud unit, reported a 19% year-over-year increase to $27.5 billion in revenue.

Amazon stock jumped almost by more than 5% in after-hours trading immediately after third-quarter financials were posted.

Shares slumped by more than 3% on Thursday prior to the earnings release, but are up almost 24% year-to-date.

Surprising Fact

Amazon slightly missed expectations last quarter and issued a weaker-than-expected forecast for the third quarter, claiming a busy news cycle would serve as a distraction for shoppers, sending shares down by about 9% at the time. “Customers only have so much attention,” CFO Brian Olsavsky said at the second-quarter earnings call.

Key Background

Amazon has undergone major cost-cutting efforts since 2022 under the direction of CEO Andy Jassy, laying off more than 27,000 employees, according to CNBC. Jassy has also shut down several projects, including a telehealth service and a same-day brick-and-mortar delivery service. But Amazon is also betting big elsewhere—it committed to spending more than $52 billion in nuclear power deals to expand data centers in Virginia, Mississippi and Ohio, Forbes previously reported. The company has announced plans to invest more than $10 billion into Project Kuiper, its initiative to build a network of 3,236 satellites to expand internet access globally, which could have billions of dollars in launch-related costs over the next five years, Wedbush Securities analysts project ahead of Thursday’s earnings call. Amazon also announced “record-breaking sales” in July for Prime Day and made its AI-powered shopping assistant Rufus available to all U.S. customers last month.

Big Number

$1.96 trillion. That’s Amazon’s market capitalization, which makes it the fifth-biggest company in the world after tech peers Apple, Nvidia, Microsoft and Google.

Tangent

Jassy issued a five-day return-to-work policy to employees last month, setting a deadline of Jan. 2 for all employees. “We continue to believe that the advantages of being together in the office are significant,” Jassy wrote in a memo to employees. Some employees are on the job hunt as a result, Fortune reported, and AWS CEO Matt Garman reportedly said at an AWS all-hands meeting that “there are other companies around” for those who “don’t work well in [an in-person] environment.”

Forbes Valuation

Jeff Bezos, the founder of Amazon who was CEO until 2021, has an estimated net worth of $204.1 billion, according to Forbes’ real-time tracker, which makes him one of three people in the world above the $200 billion mark. The majority of his fortune is tied up in Amazon—a dip in shares ahead of the company’s earnings release Thursday sent Bezos’ net worth down almost $6 billion. He ranked No. 2 on this year’s Forbes 400 list of richest Americans, after fellow tech billionaire Elon Musk.