Amazon turned in another strong quarter, with the ecommerce giant posting sales of $43.7 billion in the third quarter of 2017 and earnings that blew past analyst expectations.
The sales for the quarter, up 34% from the year-earlier period, included $1.3 billion from Whole Foods Market, which Amazon acquired on Aug. 28. Net income was $256 million in the third quarter, or 52 cents per diluted share. Wall Street analysts expected the company to post revenue of $41.6 billion and EPS of 7 cents.
Jeff Bezos, Amazon’s founder and CEO, in other announcements has touted Amazon Studios projects and has taken a hands-on approach with its Hollywood ambitions. In announcing third-quarter results, he focused on the Alexa voice-enabled services and devices. Customers have purchased “tens of millions” of Alexa-enabled devices, and in the last month Amazon has rolled out five new models, Bezos noted.
“With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better,” Bezos said in the Q3 release.
Amazon Studios — a high-profile but relatively tiny piece of Amazon’s overall business — has been in upheaval over the last few weeks. Studio head Roy Price left the company amid sexual-harassment allegations, which Amazon had known about for months. That was followed by the exit of Joe Lewis, head of original programming, and head of unscripted programming Conrad Riggs. Amazon Studios COO Albert Cheng, a former digital exec at Disney-ABC, is now acting head of the group.
Amazon is continuing to spend more on video content — analysts peg its Prime Video content spending at $4.5 billion this year — but as usual the company was tight-lipped on specifics. On the earnings call, CFO Brian Olsavsky said Amazon expects higher video-content expenses in 2018, saying it has “not backed off our strategy.”
In its earnings release, the company did call out recent deals Amazon Studios has closed. Those include pacts with “The Walking Dead” creator Robert Kirkman and “Gilmore Girls” creators Amy Sherman-Palladino and Daniel Palladino, as well as a comedy series starring Fred Armisen and Maya Rudolph, as well as the drama series “Tong Wars” from Paul Attanasio and Wong Kar-wai.
Amazon Studios also announced development on “Underground Railroad” with Barry Jenkins; “The Boys” with Seth Rogen and Evan Goldberg; “Snow Crash,” based on the novel by Neal Stephenson; “Lazarus,” based on a comic book by Greg Rucka; and “Ringworld,” based on Larry Niven’s sci-fi book series.
In addition, the company highlighted its live-streaming on Prime Video of NFL “Thursday Night Football” games worldwide. Through the first four games, “TNF” has attracted a total of 7.1 million viewers, with each viewer watching an average of 51 minutes.
On the hardware front, Amazon introduced three new Echo smart-speaker devices last month: the redesigned $100 Echo; the $150 Echo Plus with a built-in smart home hub; and the $130 Echo Spot, a smaller device with a circular screen. It also launched the a new version of the Fire TV streaming set-top, priced at $70, with support for 4K Ultra HD and high dynamic range video plus an Alexa-enabled remote.
During the quarter, Seattle-based Amazon announced its search for “Amazon HQ2,” its second headquarters city in North America, where it expects to invest $5 billion and create up to 50,000 jobs. Amazon said it received 238 proposals from across North America.
Meanwhile, Amazon said Hulu selected Amazon Web Services (AWS) as its cloud provider in Q3.