Amazon shares fall 5.6% after hours as Q3 sales miss estimates

Amazon.com Inc. (AMZN) said on Oct. 29 that third-quarter net sales rose 12% to $201.94 billion, which missed the $206.29 billion consensus estimate compiled by Finnhub.

Shares fell 5.6% in after-hours trading as of 4:31 p.m. ET, from a regular-session close of $244.02.

The company sells through its online and physical stores and offers Prime, Fulfillment by Amazon, AWS, Kindle, Fire TV, Alexa and Amazon Studios, according to its release.

Operating income rose to $28.1 billion from $17.4 billion a year earlier. Net income was $20.7 billion, or $1.89 per diluted share, compared with $21.2 billion, or $1.95 per diluted share, a year earlier. The company said the decline reflected pre-tax gains of $9.5 billion in the third quarter of 2025 from its investments in Anthropic.

Here's how the company did:

• Revenue: $201.94 billion vs. $180.17 billion a year earlier, against $206.29 billion expected, according to Finnhub
• Diluted EPS: $1.89 vs. $1.95 a year earlier
• Operating income: $28.08 billion vs. $17.42 billion a year earlier

“Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 ($184 billion revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028,” said President and CEO Andy Jassy.

Segment results

AWS net sales rose 39% to $46.0 billion, and AWS operating income reached $17.8 billion, compared with $11.4 billion a year earlier.

North America net sales rose 6% to $112.9 billion, with operating income of $8.7 billion, compared with $4.8 billion a year earlier. International net sales rose 5% to $43.1 billion, with operating income of $1.6 billion, compared with $1.2 billion.

According to its SEC filings, net income rose in each of the last three quarters, from $21.19 billion in the third quarter of 2025 to $62.65 billion in the second quarter of 2026.

Fourth-quarter guidance

The company expects fourth-quarter net sales of $240.0 billion to $247.0 billion, growth of 12% to 16% from a year earlier. It said the guidance anticipates an unfavorable foreign exchange impact of about 60 basis points.

The company expects fourth-quarter operating income of $28.5 billion to $33.5 billion, compared with $25.0 billion in the fourth quarter of 2025. It also expects advertising revenue to grow in the high teens year over year in the fourth quarter.

Cash flow and capital spending

Operating cash flow rose 29% to $168.3 billion for the trailing twelve months, while free cash flow was an outflow of $42.4 billion over the same period. The company said the shift reflects a $94.8 billion year-over-year increase in purchases of property and equipment, net of proceeds from sales and incentives.

The company said it continues to expect 2026 cash capital expenditures of approximately $220 billion. In the third quarter it received $48.1 billion from long-term debt proceeds, and long-term debt on its balance sheet was $173.1 billion at Sept. 30, up from $65.6 billion at Dec. 31, 2025.