Amazon (NASDAQ: AMZN) could not have reported a better earnings report. The company beat earnings estimates by $0.49, reporting an EPS of $0.52. Revenue surged 33.7% to $43.74 billion.
AWS is another bright spot for Amazon.com, where sales rose 42% year-over-year. When asked why unearned revenue did not grow at the same pace of past rates, Dave Fildes said Amazon’s switch to up-front monthly Prime membership fees will lower the deferred revenue. There are other mix of factors that will allow Amazon to book more of the reported unearned revenue.
For all the complaints value investors have on the P/E for AMZN stock, Amazon justified the lofty multiples by demonstrating revenue growth. Amazon is taking over many industries: retail, food, grocery, music, and possibly pharmacy. The revenue growth potential expands every time the online retailer enters new market. Amazon is leveraging its know-how in optimizing and shaking up the traditional business model.
Amazon forecast Q4 revenues of as high as $60.5 billion, compared to the $58.75 consensus estimates. Amazon’s investments in Echo devices will give the company significant levels of growth in the coming quarters. In the near-term, the product may grow its user base as consumers snap it up during Black Friday and in the holiday season.
Tech Insider
