Amazon (AMZN) 3rd Quarter Earnings: What To Expect

Given Amazon's appetite for growth - even when it comes at the expense of near-term profitability - it seemed logical that Amazon might spend a significant sum integrating Whole Foods' operations into its business. The revenues from its worldwide business for the quarter under review stood at $13.7 billion.

For the third quarter ended September 20, posted net income of $256 million, or 52 cents per diluted share, compared with net income of $252 million, or 52 cents per diluted share, in the 2016 period.

In 2015, the online retailer launched its B2B marketplace, Amazon Business, that included a number of business-specific perks such as purchasing analytics, bulk pricing and free-two day shipping on orders over $49.

Last quarter, Amazon itself forecast Q3 revenues of $39.25 to $41.75 billion, although its internal estimates are usually pretty conservative. That includes $1.3 billion from Whole Foods. For the full year, ending December, EPS is expected to be $3.63 per share, down from $4.90 per share a year ago, while full year revenue of $174.65 billion would rise 28.4% year over year.

Amazon's $13.7 billion Whole Foods acquisition accounted for $1.3 billion of revenue with an operating income of $21 million.

Investors have continued to give a pass on Amazon's laser-thin profits.

And that's unlikely to change.

With e-commerce accounting for almost 90% of Amazon's total revenue, it's easy to think that Amazon's online retail business drives the bulk of the company's profits. "Customers can now get unlimited fast delivery across their organization on a vast selection of products while maintaining increased visibility on their business purchases".

"But I would say, generally, we're very pleased with the advertising business".

Amazon's Alexa-enabled devices remain a hit with customers.

If that sounds never-ending, that's because it may be. The company had first hit the milestone in May before dipping back under. "Margin pressure is not surprising given that in addition to heavy investment, heavy promotions are occurring in the USA, specifically the on-going pricing battle with Walmart as these two retail heavyweights attempt to grow market share across multiple categories", Moody's lead retail analyst Charlie O'Shea said in comments emailed to Retail Dive. "Because Alexa's brain is in the AWS cloud, her new abilities are available to all Echo customers, not just those who buy a new device", Jeff Bezos, Amazon founder and CEO, said in the quarterly results.

He added: "These investments - in services, devices, new ventures, pricing, global markets, and business services - will all power growth in the years ahead".

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