April 6, 2018
The e-commerce retailer also expects to grow 28-38 percent in the next quarter.
Net sales for the e-commerce giant include $1.3 billion from Whole Foods Market, which amazon acquired in August. Excluding Whole Foods, and the $124 million favorable impact from year-over-year changes in foreign exchange rates, net sales increased 29 percent compared with the third quarter 2016.
However, Amazon’s impressive third quarter results come as no surprise. According to eMarketer, the retailer boasts the largest share of e-commerce sales in the U.S. with 43.5 percent and represents close to 4 percent of all retail sales in the U.S.
Furthermore, Amazon also reported that net income was $256 million in the third quarter, compared with $252 in 2016; operating cash flow increased 14 percent to $17.1 billion, compared with $15 billion the year prior; free cash flow decreased to $8.1 billion, compared with $9 billion in 2016;and operating income decreased 40 percent to $347 million, compared with $575 million in 2016. Operating income also includes income of $21 million from Whole Foods.
Looking ahead to the fourth quarter, Amazon expects net sales to be between $56 billion and $60.5 billion, or to grow between 28 percent and 38 percent. The company also expects operating income to be between $300 million and $1.65 billion, compared to $1.3 billion in 2016.
Select highlights from Amazon’s third quarter include:
- The e-commerce giant acquired Whole Foods. Upon closing, Whole Foods began offering lower prices on a selection of grocery staples.
- Amazon introduced three new Echo devices–Echo, Echo Plus and Echo Spot–and continued to enhance the device’s offerings. According to eMarketer, 25.1 million people in the U.S. will use an Amazon Echo this year, up 123.9 percent over last year.
- Amazon introduced the new Fire TV with 4K Ultra HD, High Dynamic Range and Alex Voice Remote.
- Amazon announced that Alexa and Echo will be heading to Japan with an all-new Alexa experience designed for Indian and Japanese customers.
- Amazon Music Unlimited launched for customers in France, Italy and Spain.
- NFL Thursday Night Football on Amazon Prime saw a total of 7.1 million views in the first four games.
- Amazon Studios closed deals for several new series.
- Amazon Business launched Business Prime Shipping to customers in the U.S. and Germany.
The company announced its search for its second headquarters city, where it expects to invest $5 billion and create as many as 50,000 jobs.
“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,” says Jeff Bezos, founder and chief executive officer, Amazon. “And it’s working–customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 five-star reviews, and active customers are up more than five times 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.”
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