Profits at Amazon.com continued to nudge upward for the 10th consecutive quarter, even as the online shopping giant spent more on marketing, technology and warehouses.
The financial results topped analysts’ predictions and sent shares soaring by more than 7 percent in after-hours trading.
The Seattle-based tech giant, which has more than half a million employees, said Thursday that revenue grew 34 percent, due in part to the company’s recent purchase of Whole Foods Market.
Amazon Web Services, the company’s cloud business, continued to be an important source of revenue. It brought in $4.6 billion during the third quarter, up from $3.2 billion a year earlier.
Overall profit margins, however, narrowed during the quarter as Amazon continues to invest in new warehouses and international expansion in countries like India, while also lowering prices to compete with retailers such as Walmart ahead of the crucial holiday season.
“Margins . . . remain challenged,” Charlie O’Shea, an analyst for Moody’s, wrote in an email. “In addition to heavy investment, heavy promotions are occurring in the U.S.”
Amazon looked to take on new markets during the quarter, muscling its way into the grocery business with its $13.7 billion acquisition of Whole Foods Market. Amazon executives said they have spent the past two months merging the enterprises — adding Amazon Lockers to Whole Foods stores, for example, and offering Whole Foods-branded foods for sale at Amazon.com.
“Over time, you will see more cooperation between Amazon Fresh, Prime Now and Whole Foods as we explore new ways to serve the customer,” Brian Olsavsky, Amazon’s chief financial officer, said Thursday evening in a call with analysts.