(RTTNews) - Amazon.com Inc. (AMZN) Thursday reported a drop in profit for the third quarter, the online retail giant's first quarterly profit drop in more than two years, as increase in operating costs offset revenue growth. Both earnings and revenues for the quarter fell short of Wall Street estimates. Moving ahead, the company issued a weak revenue outlook for the holiday season quarter. Shares fell more than 6% in the after-hours trading.
Seattle, Washington-based Amazon reported third-quarter profit of $2.13 billion or $4.23 per share, down from $2.88 billion or $5.75 per share last year. On average, 41 analysts polled by Thomson Reuters expected earnings of $4.62 per share for the quarter.
Amazon's sales for the quarter jumped 24 percent to $69.98 billion from $56.58 billion last year. Analysts had a consensus revenue estimate of $68.81 billion for the quarter.
Sales from North America jumped 24 percent to $42.64 billion from $34.35 billion last year, while international sales rose 18 percent to $18.35 billion from $15.55 billion. Meanwhile, revenues of Amazon Web Services, Amazon's cloud service division, jumped 35 percent to $9.00 billion.
Total operating expenses for the quarter rose to $66.82 billion from $52.85 billion last year.
Jeff Bezos, Amazon founder and CEO, said, "Customers love the transition of Prime from two days to one day — they've already ordered billions of items with free one-day delivery this year. It's a big investment, and it's the right long-term decision for customers. And although it's counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes."
Looking forward to the fourth quarter, the company expects sales of $80.0 billion to $86.5 billion. Analysts currently estimate revenues of $87.37 billion.
AMZN closed Thursday's trading at $1,780.78, up $18.61 or 1.06%, on the Nasdaq. The stock, however, dropped $111.03 or 6.23%, in the after-hours trade.
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