Amazon.com Inc. CEO Jeff Bezos promised to spend the expected profits amid a huge increase in sales related to the COVID-19 pandemic, but sales soared that he ended up with record profits instead.
reported second-quarter earnings of $ 5.2 billion, or $ 10.30 a share, on Thursday afternoon, nearly doubling from $ 5.22 a share a year earlier to a fresh quarterly record amid a sharp rise in earnings. Amazon reported sales of $ 88.9 billion, up 40% from $ 63.4 billion a year earlier and well ahead of Amazon’s forecast of $ 75 billion to $ 81
Three months ago, Bezos said he expected to spend billions on the expected operating profit that is flooding as Americans take refuge in the country due to the coronavirus pandemic buying more goods online and businesses spending more on cloud computing to support home workers stuck. “If you own a stock in Amazon, you may want to get a site because we are not thinking small,” Bezos said in May.
However, the shareholders did not escape. Instead, Amazon shares have continued to compete to record highs, gaining more than 24% in the last three months and pushing the company’s market capitalization higher than $ 1.5 trillion. Shares rose more than 4% in after-hours trading on Thursday shortly after the results were released.
“This was a very unusual quarter, and I could no longer be proud and grateful to our employees around the globe,” Bezos said in Thursday’s announcement. “As expected, we spent over $ 4 billion on additional COVID-19-related expenses on a quarterly basis to help keep employees safe and deliver products to customers in this time of high demand – the purchase of personal protective equipment, increasing the cleaning of our facilities, following new security process paths, adding new benefits to family care, and paying a special Thanksgiving bonus of over $ 500 million to front-line employees and delivery partners. ”
Earnings in Amazon core business show why investors are being hampered by Amazon, and more are joining them. The company said its e-commerce business grew 47.8% from a year earlier in the second quarter to revenue of $ 45.9 billion from $ 31.05 billion, while analysts expected $ 39.89 billion. In North America, net sales online and in Amazon physical stores such as Whole Foods Markets rose to $ 55.44 billion from $ 38.65 billion a year earlier, while overseas sales rose to $ 22.67 billion dollars from $ 16.37 billion.
Sales of units, which track current physical orders from Amazon, increased by 57% in the quarter, a sharp increase from the 18% increase in the previous year quarter. In a conference call Thursday afternoon, Chief Financial Officer Brian Olsavsky noted that online food sales tripled on a quarterly basis and worldwide video streaming doubled from a year ago. However, Amazon physical stores saw a 13% drop.
Amazon Web Services, the company’s cloud computing arm, rose with revenue to $ 10.8 billion from $ 8.38 billion, while analysts averaged $ 11 billion. As usual, AWS was the biggest driver of profit for Amazon, delivering $ 3.36 billion in operating profit while Amazon reported total operating income of $ 5.84 billion.
Even before the pandemic, Amazon had spent to set up its logistics operations to handle faster shipping for customers of its Prime subscription service, and COVID-19 has pushed that overspending into hyperdrive. Amazon now has more than 1 million employees, Bezos revealed in testimony scheduled for an antitrust hearing before a congressional subcommittee, though because many are still listed as temporary, Amazon reported the number as 876,800 on Thursday.
“Our combined number of regular and seasonal employees is currently over 1 million,” Olsavsky confirmed in prepared speeches Thursday.
Amazon said it forecasts revenue to be between $ 87 billion and $ 93 billion in the third quarter, and learned from previous earnings forecast guidelines, forecasting operating revenue of $ 2 billion to $ 5 billion even after calculating 2 $ 1 billion in COVID-related costs 19. Amazon typically expects its sale on Prime Day in the third quarter, but Olsavsky announced in his conference call Thursday that Prime Day will be scheduled for the fourth quarter in all areas , except India, where it will take place in August.