Amazon Profit Up, But Misses Street; Shares Down

(RTTNews) - Amazon.com Inc. (AMZN) Thursday reported an increase in profit for the third quarter, driven largely by revenue growth, especially at Amazon Web services. However, shares of the online retailer dropped nearly 5 percent in extended session after its profit fell short of Wall Street estimates. The midpoint of Amazon's revenue outlook for the holiday season quarter also fell short of expectations.

Seattle, Washington-based Amazon reported third-quarter profit of $252 million or $0.52 per share, up from $79 million or $0.17 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.78 per share for the quarter.

Amazon's sales for the quarter jumped 29 percent to $32.71 billion from $25.36 billion a year ago. Analysts had a consensus revenue estimate of $32.69 billion for the quarter.

Sales from North America jumped 26 percent to $18.87 billion from last year, while international sales rose 28 percent to $10.61 billion. Meanwhile, revenues of Amazon Web Services, Amazon's cloud service division, surged 55 percent to $3.23 billion.

Total operating expenses for the quarter rose to $32.14 billion from $24.95 billion last year. Amazon's operating costs continues rise as the company spends heavily on its online infrastructure and other projects. Investors have been somewhat tolerant of its losses as Amazon is perceived to be using its cash to prop up long-term growth.

Looking forward to the fourth quarter, the company expects sales of $42.0 billion to $45.5 billion. Analysts currently estimate revenues of $44.58 billion.

AMZN closed Thursday's trading at $818.36, down $4.23 or 0.51%, on the Nasdaq. The stock further dropped $43.03 or 5.26% in the after-hours trade.