Amazon just came out with a great Q3, soundly beating expectations. The stock is popping 9% after hours.
EPS was $0.45 versus Street estimates of $0.33. Revenue came in at $5.45 billion vs. estimates of $5.03 billion.
Importantly, Amazon also raised Q4 guidance. Net sales are expected to be between $8.125 billion-$9.125 billion. The Street was expecting $8.11 billion.
In the release, Jeff Bezos says the “Kindle has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com.”
Here’s a quick take from JP Morgan’s Imran Khan:
Our first reactions, prior to the 5PM ET conference call, are below. All growth rates are Y/Y unless otherwise noted.
- The revenue growth rate accelerates to 28% Y/Y from 14% in 2Q09. We had modelled 17% growth.
- North America sales are up 23%. This is above our +15% estimate, with Media sales up 13% and EGM up 36%, compared to our estimates of 5% and 27%, respectively. The increase in Media sales increases our confidence in our OW thesis.
- International sales grew 33%. This is above our +21% estimate. Int’l Media grew 22% (our est. was 8%) and EGM was up 54% (our est. was 43%).
- Gross margin was 23.4%. We had been modelling 23.5% gross margin. Pro forma operating margin was 6.4%, above our 5.7% expectation.
- Guidance implies 21%-36% revenue growth. Amazon expects 4Q revenue of $8.125B to $9.125B, compared to our previous estimate of $8.2B.
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