Amazon continues to cash in on cloud. On Thursday, the Seattle-based tech titan said revenue from its cloud computing unit rose 35 percent to US$9 billion during its most recent quarter -- but below the growth rate in recent quarters.
The growth rate for Amazon Web Services is below the previous quarter’s rate of 37 percent and significantly below the 46 percent growth rate from the same quarter a year before.
Operating income at Amazon Web Services increased to US$2.3 billion during the quarter from US$2 billion during the same period last year. AWS operating expenses have been rising: from US$4.6 billion during the same quarter last year to US$6.7 billion this past quarter.
CFO Brian Olsavsky told analysts on a conference call that AWS is making “great progress” when it comes to deals with enterprises moving into the cloud. During the quarter, Amazon said AWS -- which surpasses Microsoft Azure or Google Cloud in market share -- signed up new customers, including health information supplier Cerner Corp.; Canadian media firm The Globe and Mail; Old Mutual Limited; and electronic home appliances maker Galanz.
Amazon reported that its third quarter net sales increased 24 percent to US$70 billion, compared with US$56.6 billion in the same period the year before. The company said that net income decreased to US$2.1 billion in the third quarter, or US$4.23 per diluted share, compared with net income of US$2.9 billion, or US$5.75 per diluted share, during the same period the year before.
Analysts had expected Amazon to report third-quarter sales of US$68.8 billion versus the US$70 billion it reported on Thursday.
However, net income fell in the quarter to US$2.1 billion, compared with US$2.9 billion in the same period a year before. The company also fell short of analysts’ estimates for earnings per share of US$4.62 versus the US$4.23 it reported for the quarter, which ended 30 September. As a result, investors sent Amazon stock tumbling in after-hours trading, with shares down as much as 9 percent from its closing price of US$1,780.78 on Thursday. Shares had risen more than 15 percent since the beginning of this year.