Amazon Posts Surprise Profit, Shares Surge 10%

(RTTNews) - Shares of Amazon rose 10 percent in after-hours on Thursday after the online retailer reported a surprise third-quarter profit that beat Wall Street estimates by a huge margin, largely driven by a 23 percent jump in revenues.

Seattle, Washington-based Amazon reported a third-quarter profit of $79 million or $0.17 per share, compared to last year's loss of $437 million or $0.95 per share. On average, 35 analysts polled by Thomson Reuters expected a loss of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

Amazon's sales for the third quarter grew 23 percent to $25.36 billion from $20.58 billion a year ago. Analysts had a consensus revenue estimate of $24.91 billion for the quarter.

Sales from North America jumped to $15.01 billion from $11.70 billion last year, while international sales rose to $8.27 billion from $7.71 billion last year. Meanwhile, revenues of Amazon Web Services, Amazon's cloud service division, increased 78 percent to $2.09 billion from $1.17 billion last year.

Total operating expenses for the quarter rose to $24.95 billion from $21.12 billion last year.

Amazon's operating costs continues rise as the company spends heavily on its online infrastructure and other projects. Investors have been somewhat tolerant of its losses as Amazon is perceived to be using its cash to prop up long-term growth.

Early this week, Amazon announced it would hire 100,000 seasonal employees to meet demand during the holiday period, up from about 80,000 hired last year.

For the current quarter, the company expects sales of $33.50 billion to $36.75 billion. Analysts currently expect revenues of $35.16 billion for the quarter.

AMZN closed Thursday's trading at $563.91, up $8.14 or 1.46%, on the Nasdaq. The stock further rose $54.31 or 9.63% in the after-hours trade.