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Cost-cutting and a growing advertising business contributed to strong quarterly sales and earnings at ecommerce group Amazon, as it reiterated that growth in its core cloud computing arm was stabilising.
Overall sales rose 13 per cent year-on-year in the third quarter to $143.1bn, while pre-tax earnings jumped more than 300 per cent to $11.2bn, compared with forecasts for $7.68bn, according to S&P Capital IQ.
Sales at Amazon’s cloud computing business, an important driver of its profits, rose 12 per cent to $23.1bn, in line with expectations and at the same rate as during the second quarter. Margins in the unit increased 4 percentage points to 30.3 per cent.
Investors have been nervously watching Amazon’s cloud sales growth. It said in August that the division had stabilised following a sharp slowdown earlier in the year.
“We had a strong third quarter as our cost to serve and speed of delivery in our stores business took another step forward, our (cloud) growth continued to stabilise, our advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Amazon chief executive Andy Jassy.
The shares were up 0.6 per cent in after-hours trading in New York.
