Amazon continues to deliver for its investors, as the internet commerce behemoth posted another monster quarter, blowing past expectations on revenue and earnings.
After the close of markets Wednesday, Amazon reported revenue of $43.74 billion and earnings of 52 cents a share for the three months ended September 30. For the corresponding period last year, Amazon generated $32.71 billion in revenue and earnings of 52 cents a share. Analysts had projected $42.14 billion in revenue and earnings of 3 cents a share on average.
Amazon founder and CEO Jeff Bezos emphasized the growth of the company’s Alexa voice assistant protocol (and the Echo robot speakers that use it) when detailing the company’s many milestones in the quarter.
“In the last month alone, we’ve launched five new Alexa-enabled devices, introduced Alexa in India, announced integration with BMW, surpassed 25,000 skills, integrated Alexa with Sonos speakers, taught Alexa to distinguish between two voices, and more. 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 said in a statement. “And it’s working — customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 5-star reviews, and active customers are up more than 5x since the same time last year. With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better.”
Amazon also provided guidance for the fourth quarter of the year, estimating its total revenue to be between $56 billion to $60.5 billion, which would be a 28 to 38 percent increase over the fourth quarter of last year.
Amazon Studios is largely viewed as a sweetener to get people to sign up for Prime, but after a string of expensive shows that failed to make an impact — and sexual harassment allegations against chief Roy Price — the company has changed its top leadership. Price, head of unscripted Conrad Riggs and head of comedy and drama Joe Lewis have all left the company in this month.
However, Amazon’s entertainment business remains a small part of the total enterprise. The company enjoyed another successful Prime Day July 11, which Amazon said delivered more sales than any other day in its history. It also absorbed Whole Foods this past quarter, closing its $13.7 billion buyout of the organic market in August.
The deal was part of a concerted effort to start plowing its massive sales back into the company. On its earnings call back in July, Amazon CFO Brian Olsavsky hinted at the third quarter being a heavy investment period as it ramps up for the holiday season. (Amazon’s fourth quarter sales counted for nearly a third of its total sales in 2016.) And just this week, Amazon announced Amazon Key, a smart lock and camera-enabled system that would allow its delivery drivers to drop off packages inside people’s homes.
Amazon’s dominance was reinforced in September, when the company announced its plans to build a second headquarters capable of accommodating up to 50,000 workers. The project kicked off a massive bidding war, with 238 cities falling over themselves to woo the global powerhouse. “Jeff, come home,” Richard Berry, mayor of Albuquerque, New Mexico, pleaded with Bezos. “We’d love to have you.”
At the same time, Wall Street has kept its love affair going with Amazon. Since hitting its all-time high of about $1,050 before its second quarter earnings, shares of Amazon have hovered between $950 and $1,000 for the last three months.
On the company’s earnings call Thursday afternoon, Olsavsky reiterated Amazon’s commitment to video, even with the resent executive turmoil. Olsavsky said Amazon video users spend more money on Prime, making it essential for the company to keep them engaged.
“We have a lot of data. We see viewing patters and sales patterns. We can see which video resonates with prime members, and which doesn’t,” said Olsavsky. “We’re always looking for more impactful shows, more shows that resonate with our customer base and what they want to see.”
Olsavsky didn’t include details on upcoming shows or its content budget for 2018.