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Amazon Web Services Drives Surprising Profit For Amazon

Amazon reported an unexpected third-quarter profit of $406 million.

As Amazon dukes it out with the New York Times over whether Amazon is or is not a nice place to work, the tech company reported surprising third-quarter profits.

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During an earnings call on Thursday, Amazon revealed that Q3 proved more profitable than expected, with a 23% year-over-year increase in revenue to $25.4 billion. The increase comes largely from growth at Amazon Web Services, the cloud-computing platform that powers many major websites in the U.S., including Netflix, Reddit, LinkedIn, and Pinterest. Amazon Web Services brought in an impressive $2.08 billion in revenue, a 78% increase year-over-year.

The numbers have put Amazon stock on the rise (up $10 in after-hours trading) following analyst expectations that the company would post a loss of $0.13 per share.

In contrast to its success with Amazon Web Services, the company had little positive to say about its recently released, $50 Fire tablet, noting only that the tablet “has the best display on any tablet under $50 and is also available for an even lower price when purchased in a six-pack.” In August, Amazon laid off dozens of engineers from its consumer hardware division.

About the author

Nikita Richardson is an assistant editor at Fast Company magazine.

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