Amazon (AMZN) Surges After Blowout Third Quarter

So much for dollar exposure... Amazon (NASDAQ: AMZN) surged 11% after-hours Thursday after the company announced that net sales in the third quarter increased by 23% year over year to $25.4 billion. Excluding the FX loss of $1.3 billion, sales growth would have been 30%. This easily topped the consensus of $24.91 billion. Operating income was $406 million in the third quarter, compared with an operating loss of $544 million a year ago. EPS was $0.17, versus a loss of $0.95 last year, $0.30 better than the analyst estimate of ($0.13).

Operating cash flow increased 72% to $9.8 billion for the trailing twelve month. Free cash flow increased to $5.4 billion for the trailing twelve months.

Guidance was positive but a very wide range, although the company expects a record holiday season. Net sales for the fourth quarter are expected to grow between 14% and 25% to be between $33.50 billion and $36.75 billion versus the consensus of $35.16 billion. Operating income has a huge window of $80 million to $1.28 billion, compared to $591 million in fourth quarter 2014.

The AWS unit was a big driver for the bottom line. Operating income in the unit surged to $521 million in the quarter versus $98 million last year.

Sales growth at Amazon's North America unit grew 28.3% to $15 billion, the International unit saw sales growth of 7% and the AWS unit saw sales growth of 78%.

Key product announcements include:

Amazon 6 pack - Possibly to celebrate it financial success, Amazon is offering a deal on six packs...of Fire tablets. The tablet typically sells for $50 per but Amazon is offering promotion of 6 for $250.

Fire TV in Japan - Amazon launched Fire TV and Fire TV Stick for Japanese customers, which provides access to Prime Video, Amazon Video, Hulu , Netflix , YouTube.com and others.

Accenture promoting AWS - Accenture and AWS announced a team of dedicated professionals from both Accenture and AWS that will help enterprise customers more easily migrate their existing applications and build new applications for the AWS Cloud.

Amazon Dash Button has received an overwhelmingly positive customer response and selection continues to grow; customers can now choose from over 500 products from 29 popular brands.

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