Amazon tops 540K employees after swallowing Whole Foods in $13.7B deal

Tammy Harvey
October 28, 2017, Inc. shares were trading at $972.15 per share on Thursday afternoon, down $0.76 (-0.08%).

Although AWS has continued to be a massive profit driver, accounting for almost 10% of total revenue in Q3, sales growth for the cloud service actually slowed down for the eighth straight quarter. And it forecasts operating income between $300 million and $1.65 billion, compared with $1.3 billion in the same period a year ago. This guidance includes approximately 1,000 basis points of impact to its year-over-year growth rate from Whole Foods Market.

O'Shea also noted revenue growth and operating income at AWS "more than offset" the loss Amazon took on through investments in its global business. But some analysts believe the honeymoon between Amazon and the recently-acquired Whole Foods Market may be ending, with signs of a clash between the two corporate cultures beginning to emerge.

In terms of Wall Street estimates, analysts are looking for EPS of ($0.01) on $42.25 billion in revenues.

He called the growth in service sales along with Amazon's 59% year-over-year growth in subscription services in Q3 a positive, being more predictable sources of revenue.

Most American retailers are beside themselves trying to compete against Amazon, but very few have the kind of diverse business units found under its umbrella, which provide significant cushioning. Operating income from e-commerce sales in North America was $112 million.

The Amazon Web Services or AWS, which handle computing and data for large companies, saw growth in profit margin compared to the quarter before, posting a rise in sales of nearly 42% to end at $4.57 billion, which beat estimates of $4.52 billion.

In addition, Bezos said active customers on Alexa-enabled devices are up five times over the same period previous year. Amazon CEO Jeff Bezos said customers have now purchased "tens of millions of Alexa-enabled devices". "Amazon owns and operates an ecosystem of platforms that reinforce each other internally and with customers", he said.

"With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better".

An Amazon Echo Dot is displayed during a program announcing several new Amazon products by the company, in Seattle. Year-to-date, AMZN has gained 29.64%, versus a 16.07% rise in the benchmark S&P 500 index during the same period.

Operating income sank 40% to $347 million, and net income rose to $256 million, far above analysts' expectations. The Whole Foods deal includes 87,000 people who worked at the grocery chain, making up a big chunk of the employment growth this quarter.

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