The company’s shares were essentially flat shortly after the market closed Tuesday, but gained almost 1% two hours after the closing bell. Amazon’s stock has grown nearly 69% over the past year.
Massive earnings beat
Net income in the quarter hit $7.2 billion — nearly double the $3.7 billion Wall Street predicted and more than double the $3.3 billion in income the company earned in the year-ago quarter. Earnings per diluted share were $14.09.
The quarterly results include sales from Prime Day, which was held October 13-14 after being postponed over the summer because of the pandemic. Sales from Prime Day, as well as continued demand for online shopping as Covid-19 cases surged, contributed to 40% year-over-year growth in Amazon’s net sales in North America, which totaled more than $75 billion. International sales jumped 57% to nearly $37.5 billion.
Amazon said it delivered more than a billion products to customers worldwide during a “record-breaking holiday season.”
“AWS is well on its way to creating an annualized $50 billion revenue company,” Patrick Moorhead, principal analyst at Moor Insights and Strategy, said in an emailed statement. “This makes AWS larger than Salesforce.com and SAP combined. Equally impressive is that AWS delivered over half of the company’s operating profit.”
A key growth area for Amazon is its advertising business. The company’s “other revenue,” which primarily includes advertising, grew 64% during the quarter, an acceleration in growth from the two previous quarters, CFO Brian Olsavsky said on a call with analysts Tuesday.
Amazon’s strong overall sales performance “may obscure the more important story of Amazon’s surging ad business,” eMarketer Principal Analyst Andrew Lipsman said in a statement. “Two consecutive quarters of huge bottom-line beats in the face of rising operational costs and softening AWS growth points to a much more profitable ads business than previously appreciated.”
As for the full year results, Amazon reported total net sales increased 38% to $386.1 billion, more than $6 billion more than analysts had projected. Net income for 2020 reached $21.3 billion, or $41.83 per diluted share, an increase of nearly 84% from a year earlier.
Nucleus Research analyst Daniel Elman said he’s “not entirely surprised” to see the huge jump in annual sales “given the worldwide shift to e-commerce in light of the pandemic.”
“With this change in consumer behavior likely to remain permanent, and Amazon’s accelerating shipping and fulfillment speeds, the company’s dominance as the…
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