Jeff BezosAmazon CEO Jeff BezosChip Somodevilla/Getty
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It's a big miss on profits but nearly in-line with revenue expectations. Fourth quarter revenue guidance was lower than expected too.
Amazon stock was down as much as 7% in after hours, and is now down about 4.5%.
Here are the most important numbers:
  • EPS (GAAP): $0.52 per share vs. $0.78 per share average analyst estimate
  • Revenue: $32.7 billion vs. $32.69 billion average analyst estimate (up 29% year-over-year)
  • AWS (revenue): $3.23 billion vs. $3.13 billion expected (up 55% year-over-year)
Net income came in at $252 million, putting Amazon in the black for six straight quarters — an unusual situation for the company which historically reinvests profits into new growth opportunities. But that's lower than last quarter's $857 million, ending the previous three quarters' record-profit streak.
Part of the profit decline has to do with increased investments in areas like more fulfillment centers and video content. In the third quarter, the company opened 18 new fulfillment centers, and it's expected to nearly double its spend on video content through the second half of this year.
"We are in a period of advancing up our investments in the second half of 2016, even more so than in prior years," Amazon CFO Brian Olsavsky said in a press call Thursday. 
Investors were spooked by the lower than expected revenue guidance for fourth quarter, traditionally the biggest quarter for Amazon. The company's fourth quarter revenue guidance came in the range of $42 billion to $45.5 billion, slightly lower than analyst expectations of $42.18 billion to $46.27 billion.

Screen Shot 2016 10 27 at 2.27.35 PMAmazon
Amazon's cloud business, Amazon Web Services, continues to drive the company's growth. AWS is the most profitable business for Amazon, bringing in $861 million in operating income, more than double last year's $428 million, at a solid 26% margin. 
The company reported operating income of $575 million, up 41% from last year's $406 million.
Amazon ended the quarter with over 306,000 employees, a 38% increase from last year.
Amazon has been one of the best performing stocks in tech, jumping over 30% in the past year and more than doubling over the last 18 months. It is now the fourth largest public company in terms of market cap.
Screen Shot 2016 10 27 at 2.26.30 PMAmazon

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

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