Amazon shares pass $1,000 after posting strong financials

October 26, 2017 steezy

Amazon shared third-quarter earnings after the bell on Thursday, smashing expectations. Shares quickly ticked up 7 percent in initial after-hours trading, to above the $1,000 per share milestone.

The company posted significantly better-than-expected earnings, at 52 cents per share, when analysts were forecasting just three cents. The $256 million in net income was unusually high profit for Amazon, a company which typically reinvests in growth.

Revenue came in at $43.74 billion, versus the consensus estimate of $42.14 billion. This is also 34 percent higher than last year. The Whole Foods acquisition, which was completed in late August, accounted for $1.3 billion in sales for the quarter. Prime Day, Amazon’s annual discount day in July, also contributed to the successful quarter.

Revenue for Amazon Web Services (AWS) was $4.57 billion, versus the $4.51 billion expected. This is Amazon’s cloud services platform, which powers websites for customers like Adobe and Airbnb.

Amazon says its fourth-quarter guidance will be in the $56 billion and $60.5 billion range, which is comparable to Wall Street estimates.

Amazon founder and CEO Jeff Bezos touted the success of its popular voice-activated device, Alexa. “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,” said Bezos in a statement.

James Cakmak, analyst at Monness, Crespi & Hardt, said he “can see a path to becoming the world’s first trillion dollar company.” Said Cakmak, “there’s something to be said for a company that can deliver accelerating growth on a $175B revenue base, while having not yet even begun to tap into their emerging opportunities like food delivery, media, advertising, pharmaceutical, and logistics.”

Shares closed Thursday at $972.43, but quickly jumped to more than $1,000 after the earnings release. The company has a market cap of $467 billion.