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Amazon (NASDAQ:AMZN), a veritable titan in the e-commerce sphere, has generated a return of over 90 percent relative to the low of $1,676.61 that the stock hit back in March. Today, the company is in the limelight as it gears up to reveal its earnings for the third quarter of 2020.

Amazon (NASDAQ: AMZN) Financial Scorecard

For the three months that ended on the 30th of September 2020, Amazon earned $96.1 billion in revenue, exceeding consensus expectations by 3.8 percent and registering an annual increase of 37 percent. This compares with $88.9 billion that the company earned in the second quarter of 2020.

Revenue Comparison

Revenue

0

20

40

60

80

100

120

0

20

40

60

80

100

120

Q3 2019 70

Q2 2020 88

Consensus 92

Actual 96

(All figures are in billions of dollars)

As far as Amazon’s business segments are concerned, Third-party sellers registered the biggest jump in growth.

Segmental Revenue Comparison

Q3 2019

Q3 2020

0

9

18

27

36

45

54

0

9

18

27

36

45

54

Online Stores 35

48

Physical Stores 4

3

3rd Party Sellers 13

20

Subscription Services 4

6

Amazon Web Services 8

11

Other (Ads) 3

5

(All figures are in billions of dollars)

A geographical breakdown of Amazon’s revenue is as follows:

Geographical Segmentation of Revenue

Q3 2019

Q3 2020

0

10

20

30

40

50

60

0

10

20

30

40

50

60

North America 42

59

International 18

25

AWS 8

11

(All figures are in billions of dollars)

Moreover, Amazon earned $29.5 billion in Free Cash Flow on a trailing 12-month basis.

Free Cash Flow Comparison

Free Cash Flow

0

6

12

18

24

30

36

0

6

12

18

24

30

36

Q3 2019 23

Q2 2020 31

Q3 2020 29

(All figures are in billions of dollars)

Finally, the company earned $12.37 in non-GAAP diluted EPS, exceeding consensus expectations by a whopping 68 percent.

EPS Comparison

EPS

0

3

6

9

12

15

18

0

3

6

9

12

15

18

Q3 2019 4

Q2 2020 10

Consensus 7

Actual 12

(All figures are in dollars)

Amazon noted in its earnings release:

"We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season. Big thank you to our employees and selling partners around the world who’ve been busy getting ready to deliver for customers this holiday.”

As far as projections are concerned, Amazon expects to earn between $112 billion and $121 billion in revenue and between $1.0 billion and $4.5 billion in operating income during the fourth quarter of 2020.

Investors have reacted positively to Amazon’s earnings announcement with the stock posting a gain of around 1 percent in the after-hours trading.

Source

Today’s development comes amid concerns surrounded Amazon’s recent Prime Day event. As per a recent investment note published by Citi analyst Jason Bazinet, Amazon eschewed to include the customary "biggest day ever" flourish in its press release, choosing to describe the event only as “record-setting”. According to Bazinet, the delay of the event from July to October – and the attendant proximity to the holiday season – along with a pandemic-driven shift in spending patterns may be partly to blame for the flat performance. On the other hand, Piper Sandler analyst Thomas Champion took a decidedly optimistic route when he postulated that Prime Day sales increased by 49 percent on an annual basis to $10.6 billion.