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Amazon beats estimates with stellar third-quarter earnings

Amazon Inc released its third quarter earnings report after hours on Thursday, which blew investor expectations out of the park, with strong beats on earnings per share and revenue. The company saw its net sales increase 37% year over year to $96.1 billion and its operating income increase 96% year over year to $6.2 billion. Yahoo Finance’s Jared Blikre breaks down the company’s earnings report on The Final Round.

Video Transcript

SEANA SMITH: Amazon is out with its earnings results. Jared Blikre has those earnings for us. Jared.

JARED BLIKRE: We got some big beats here, and the stock is up 1% in the post-market. And that's after being up 1 and 1/2% before the bell today. We see third-quarter net sales coming in at $96.1 billion. And that handily beats the estimates of $92.71 billion. That's for one quarter, up 37% year over year.

And EPS an even bigger beat, $12.37 versus $7.55. And that's versus a year ago-- $4.23, so basically tripling that EPS number from a year ago. Third-quarter operating income, $6.2 billion. That's up 96% year over year, almost doubled. Estimate was for $4.73 billion. So on those headline numbers, really knocking out of the park.

Just a few other tidbits here. Operating margin, 6.4%. North American segment sales coming in at $59.4 billion. And then their Prime Day, which they-- as we know they moved into the month of October here-- that is being disclosed as having $3.5 billion in third-party sales. So I don't believe we're going to be getting the full effect of that until the following quarter, but interesting to know here.

So big beats on both the top and bottom lines here. Just looking for some other segments-- service sales, $43.4 billion in revenue and international segment sales, $25.17 billion here.

DAN ROBERTS: And guys, just to jump in on Amazon, in some ways, we fully expected these kind of beats, right? But the narrative has shifted. During COVID, we've seen huge, huge e-commerce surges, you know? So in some ways, this is SOP for Amazon, these kind of gains. But at the same time, we've seen huge gains for Best Buy, Target, online-only retailers like Wayfair, Etsy.

And what's interesting to me, in this earnings press release, Bezos starts the whole letter by talking about Amazon bringing its minimum wage two years ago up to $15 an hour-- this time challenges specifically Best Buy and Target to do the same. And it's no surprise to name those two companies, which have seen big, big boosts during the pandemic. Another one is Urban Outfitters.

So many of these brick and mortar retailers-- Dick's Sporting Goods, I could keep going-- have seen these huge surges in e-commerce. So to me, the larger story here-- and Amazon is, of course, the biggest part of it-- but now you're seeing other names that had previously not seen these surges. The biggest story is the dramatic acceleration we're now going to see. And what percentage of all US retail happens online? It has jumped, and I don't think it's ever going to go back.

SEANA SMITH: Yeah, certainly, that was the big question here going into this, just whether or not Amazon was going to live up to some of those expectations. So apparently, looking at least at these numbers and also their fourth-quarter guidance, they're exceeding the Street's expectations.