Amazon Earnings: Beyond Any Expectations

EPS was $0.45 versus Street estimates of $0.33. Revenue came in at $5.04 billion vs. estimates of $5.03 billion.

Importantly, Amazon (AMZN) also raised Q4 guidance. Net sales are expected to be between $8.125 billion-$9.125 billion. The Street was expecting $8.11 billion.

In the release, Jeff Bezos says the "Kindle has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com." The company did not release specific sales figures for the Kindle.

Some metrics:

• The revenue growth rate accelerates to 28% Y/Y from 14% in 2Q09.

• North America sales are up 23%.

• International sales grew 33%.

• Gross margin 23.4%.

• Guidance implies 21%-36% revenue growth. Amazon expects 4Q revenue of $8.125B to $9.125B

• Amazon was able to keep its costs in check while gaining market share in virtually every product category.

Beyond Trading Corporation has been a firm believer in Amazon's great quarter since before the earnings announcement, having one of the highest targets on the stock in Wall Street $115 before earnings.

Amazon surpassed our best expectations and we naturally responded to that achievement, increasing our target to $126-$130

Vieira, Beyond Trading CEO:

It was obvious Amazon was going to have a great quarter. In our case the key factor to increase Amazon target from $95 to $115 on October, 7th before earnings was the release of Kindle global version and the fact Amazon has a wide selection of articles at great prices. The release of a global Kindle version and investors confidence on earnings triggered the necessary buying interest on the stock which in our opinion is well deserved at this point. Our upside target increase before Amazon earnings release helped subscribers to hold onto their trading profits since a strong buy recommendation was issued at $77-78.

We believe momentum will continue until next quarter earnings announcement given the phenomenal quarter. Today, Amazon is a clear global leader, a brand recognized all over the world gaining market share to its major competitors, where management has proven to be on investors side.

Disclosure: the company does not have a position on the stock. Beyond Trading Corporation, reiterated shares of Amazon a Strong Buy before earnings and increased target from $115 to $126-130.