AWS Q3 revenue up 78 percent to $2.08 billion

Overall, Amazon posted surprise profit of 17 cents per share. Wall Street was bracing for a loss of 13 cents per share.

Amazon published third quarter financials after the bell on Thursday, and once again all eyes were on tech giant's hugely successful cloud juggernaut, Amazon Web Services.

AWS delivered Q3 revenue of $2.08 billion, up 78 percent from a year ago. The cloud unit had operating profit of $521 million.

Overall, the tech giant reported a surprise net income of $79 million, or 17 cents per share (statement), up from a net loss of $437 million in the same quarter a year ago.

Non-GAAP earnings were 17 cents per share with revenue of $25.4 billion, up 23 percent year-over-year.

Wall Street was bracing for a loss of 13 cents per share and $24.9 billion in revenue. A year ago, Amazon posted a loss of 95 cents per share with revenue of $20.6 billion.

Investors were apparently pleased by the results, as share prices jumped between 8 and 11 percent in after market trading.


For the current quarter, Wall Street is projecting revenue of $35.116 billion and operating income of $27 million.

Amazon responded with a Q3 revenue guidance range of $33.5 billion to $36.75 billion, with operating income of $80 million to $1.28 billion.

Looking at the bigger picture, it's clear AWS is a major driver of Amazon's profits. Operating profit on AWS in Q3 was nearly as much as Amazon's North America e-commerce business.

It's also growing incredibly fast, with operating profit up 432 percent year-over-year. AWS posted $5.5 billion in net sales for the first nine months of the year, compared to $3.2 billion during the same time period the year prior.


In terms of Amazon's branded devices, CEO and founder Jeff Bezos used his prepared statement to slip in a product placement for the super low-cost Fire Tablet.

"For the first time, we're recommending you bring home a six-pack for the whole family," said Bezos. "At a price of $50 for one or $250 for a six-pack, Fire sets a new bar for what customers should expect from a low-cost tablet."

Bezos noted that the Fire tablet is the best selling product on Amazon, and due to the recent price cuts, the company is now building "millions more" than it had planned.