Executive Summary

• Amazon reported 3Q17 EPS of $0.52, flat year over year but beating the $0.07 consensus estimate. Net sales (including Whole Foods Market) were $43.7 billion, up 33.7% year over year and beating the $41.6 billion consensus estimate.
• Subscription services was the fastest-growing segment, growing by 59% in the quarter, followed by Amazon Web Services (AWS) at 42%. Amazon also broke out $1.3 billion of revenue from its physical stores.
• Guidance for 4Q17 calls for revenues of $56.0–$60.5 billion, above the $54.2 billion consensus estimate, and for operating income of $300 million–$1.65 billion, whose midpoint is below the $1.50 billion consensus estimate.