Amazon Unveils Its First Smartphone founder and CEO Jeff Bezos. Photograph by David Ryder — Getty Images

Amazon’s Prime Day Festival Continues to Be a Revenue Driver

Oct 27, 2016 reported a lower-than-expected quarterly profit on Thursday as expenses rose and the company provided a disappointing fourth-quarter revenue forecast.

Amazon (amzn), whose shares were down 6.8% in after-hours trading, said its net income rose to $252 million, or 52 cents per share, from $79 million, or 17 cents per share, a year earlier. It was company's sixth straight profitable quarter.

But earnings per share were far short of the average estimate of 78 cents, according to Thomson Reuters (tri).

Total operating expenses rose 31.5% to $10.94 billion as the company invests in Amazon Web Services, expands its Prime program internationally, builds up its warehouse and delivery infrastructure and increases its original video offerings.

Amazon forecast net sales of between $42.0 billion and $45.5 billion for the current-quarter, which includes the all-important holiday shopping season.

Analysts on average had expected fourth-quarter sales of $44.58 billion, according to Thomson Reuters.

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Amazon said earlier this month it would hire more than 120,000 seasonal workers in the United States for the holiday season, 20% more than last year, highlighting the growing threat the company poses to traditional retailers.

The company reported a 29% rise in quarterly revenue, in line with expectations, boosted by a big jump in sales from its Prime Day annual shopping festival, strong back-to-school shopping and its market-leading cloud services business.

The world's biggest online retailer said its net sales rose to $32.71 billion in third quarter ended Sept. 30 from $25.36 billion a year earlier.

Amazon said in July that customers placed 60% more orders worldwide in its second Prime Day sale. It didn't provide sales figures at the time.

Revenue from Amazon Web Services, the company's cloud services business, surged 55% to $3.23 billion, beating the average estimate of $3.19 billion, according to market research firm FactSet StreetAccount.

Long known for heavy spending and losses, Amazon has now found consistent profit from selling computer storage and services in the cloud.

The meteoric rise in sales in the market-leading business reflects how companies globally are turning to Amazon and Microsoft (msft) to host their data, leaving once critical software programs and hardware in the dust.

Amazon's net sales in North America, its biggest market, jumped 25.8% to $18.87 billion in the latest quarter.

Up to Thursday's close of $818.36, Amazon's shares had risen 21.1% this year.

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