The latter was in line with Wall Street expectations, while the company's earnings per share fell slightly short of the predicted values, prompting the firm's share price to fall by around 3% in after-hours trading.
Amazon told investors to expect Q3 revenues of between $39.25 billion and $41.75 billion. The retailer had earned 40 cents per share instead of $1.42 as analysts polled by Reuters had expected.
During a conference call with analysts to discuss the results, transcribed by Seeking Alpha, Amazon.com CFO, Brian Olsavsky, confirmed the quarter as a significant one for AWS, with the company's cloud arm now considered to be a $16bn run rate business. He added that their video content along with Amazon Prime membership has helped the company retain subscribers, and persuade those who held a free trial to opt for a paid subscription.
From its origins as an online bookseller, Amazon has jumped into areas that historically had barriers to e-commerce, from apparel to appliances. The company is trying to push into new markets, such as India. Analysts had expected operating income in the third quarter of $931 million, according to FactSet StreetAccount.
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The club, which offers fast shipping and video streaming for $US99 per year in the United States, encourages shoppers to buy more goods, more often.
Olsavsky declined to discuss in detail the company's strategy for the upscale grocer but said, "We really think it will be a big boost for us as we expand our grocery and consumables offering".
The quarter also saw AWS cement its place as a sizeable revenue driver for its parent company, with revenue hitting $4.1bn for the quarter, and up 42% on the previous year, while operating income hit $916m. In addition, Starbucks lowered its full-year net earnings per share target to a range of $1.96 to $1.97 from a previously lowered forecast of $2.06 to $2.10, following a deceleration in USA same-store sales that has continued into July.
Compared to the same time a year ago, AWS' revenue was up 42 per cent and Amazon's overall service revenues rose 42 per cent to $US13.2 billion.
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