Amazon triples net income, nears $100 billion in quarterly revenue

International operations turned a profit of $407 million, while revenue for the company's 'other' category, which is mainly its advertising services, grew 50% year over year.

Oct 30, 2020 05:07:00 AM | Article | Matthew Miller Share -

The company in its earnings release spotlighted efforts in India

Expectations for Amazon's third-quarter financial results were high, yet the company surpassed them handily, reporting net income of $6.33 billion on a 37.4% year-over-year increase in revenue, which reached $96.15 billion.

The net-income figure represents nearly a tripling (197%) on a YOY basis. Operating income nearly doubled (96%) to $6.19 billion.

The company reported a 51% YOY increase in net sales, to $5.4 billion, in its 'Other' category, which represents primarily its advertising services. The company did not provide income figures for this segment.

Meanwhile, AWS, the company's hosting service, hit $11.6 billion in net sales, a 29% YOY gain, resulting in $3.54 billion in operating income, up 56% YOY.

While North America—where net sales increased 39% YOY to $59.37 billion and operating income grew 76% YOY to $2.25 billion—remains the company's primary market, international expansion efforts are paying off. International operations delivered net sales of $25.17 billion for the quarter, up 37% YOY. And whereas the international segment lost $380 million a year ago (and continued to notch losses through Q1 of this year), it delivered $407 million in operating income this quarter. 

Looking ahead, Amazon said it expects net sales between $112 billion and $121 billion in Q4, which would represent a YOY improvement between 28% and 38%. It expects operating income between $1 billion and $4.5 billion, compared with $3.9 billion in Q4 of 2019, which takes into account approximately $4 billion in costs related to Covid-19.

As it continues efforts to overcome resistance in India (see "Amazon gets cold shoulder in India: What does this spell for its future?"), the company in its earnings release spotlighted the following:

• The addition of 10 fulfillment centers, five sorting centers, nearly 200 delivery stations, and over 100,000 seasonal jobs in India.
• In Gujarat, the launch of an all-women delivery station, the second of its kind in the country and part of what the company said is an ongoing effort to provide more career opportunities for women.
• Stand for Handmade, a 10-week program to help boost sales for Indian artisans, weavers, and women entrepreneurs by waiving selling fees and promoting local, handmade products to customers. 

In Australia, the company launched Amazon Launchpad Innovation Grants, which it bills as an initiative to celebrate innovation by Australian startups, entrepreneurs, and small and medium-sized businesses.