Amazon Posts Record 13.9% Operating Margin Despite 11% Shipping Cost Surge

Amazon (Nasdaq: AMZN) reported record third-quarter operating profitability after Thursday's close, with operating income up 61% to $28.1 billion and an all-time-high operating margin of 13.9%, even as worldwide shipping costs rose 11% year over year to $28.3 billion amid fuel and linehaul inflation. Revenue rose 12% to $201.9 billion, missing Wall Street's $202.3 billion estimate, while earnings per share of $1.89 fell short of the expected $1.96. North America operating income jumped 82% to $8.7 billion on $112.9 billion in revenue, up 6%. AWS revenue climbed 39% to $46 billion. CFO Brian Olszewski said better inventory placement, shorter shipping distances and package consolidation lowered per-unit cost to serve, with shipping costs up 8% excluding fuel and linehaul inflation — roughly 4 points below unit growth. CEO Andy Jassy said the company now runs more than 1 million robots and expects transportation cost pressure to intensify in the fourth quarter. Amazon guided fourth-quarter sales of $240 billion to $247 billion, up 12% to 16%, and operating income of $28.5 billion to $33.5 billion.