Amazon's coronavirus symptoms: Swelling of the profit, large sales deposits, insatiable demand
- Reference: 1596156973
- News link: https://www.theregister.co.uk/2020/07/31/amazon_q2_2020/
- Source link:
Analysts, on average, anticipated a figure more like $81.53bn, a sign that they failed to appreciate the online store's prospects at a time when so many people are working from or otherwise stuck at home. They were even further off with EPS estimates, which averaged $1.46 and came in at $10.30.
This at a time when the US economy [1]contracted 33 per cent .
"This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe,” said Jeff Bezos, Amazon founder and CEO, in [2]a statement .
Bezos, the world's richest man, on Wednesday [3]defended his corporation at a congressional antitrust hearing. In his statement, he cited the challenge of [4]income inequality .
Amazon managed its earnings bonanza despite spending more than $4bn during the second quarter on COVID-19-related initiatives to keep employees and suppliers safe. The biz expects to spend about half as much on similar efforts in Q3.
Amazon's relevant metrics for the three months to June 30 include:
Net sales $88.9bn, up 40 per cent from $63.4bn in Q2 2019.
Operating income $5.8bn, up 87 per cent from $3.1bn in Q2 2019.
Net income $5.2bn, up 100 per cent from $2.6bn in Q2 2019.
Diluted EPS $10.30, up from $5.22 in Q2 2019.
AWS revenue reached $10.8bn, up 29 per cent from $8.3bn in Q2 2019.
On Amazon's conference call for investors, CFO Brian Olsavsky said the internet titan saw increased demand for groceries and consumer goods in March and that expanded into other categories in subsequent months.
He attributed Amazon's earnings success to "increased consumer demand, led by Prime Members."
Olsavsky said that companies want to trim their expenses and that AWS salespeople are helping customers as they try to find ways to reduce their cloud spending.
Billing at AWS, as with other cloud providers, can [5]get out of hand because cloud service usage isn't always obvious to, or anticipated by, those renting computing infrastructure. ®
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[1] https://www.msn.com/en-us/money/markets/us-economy-contracts-to-record-329percent-jobless-claims-rise-to-143-million/ar-BB17mrZT?li=BBnb7Kz
[2] https://ir.aboutamazon.com/news-release/news-release-details/2020/Amazon.com-Announces-Second-Quarter-Results/default.aspx
[3] https://www.theregister.com/2020/07/30/apple_amazon_facebook_congress/
[4] https://blog.aboutamazon.com/policy/statement-by-jeff-bezos-to-the-u-s-house-committee-on-the-judiciary
[5] https://chrisshort.net/the-aws-bill-heard-around-the-world/
[6] https://whitepapers.theregister.com/
Perfect Storm for Amazon
If you are in the high risk category for COVID-19, as I am, then the second quarter of 2020 was a perfect market for Amazon. Most of the local stores had primitive procedures in place for contactless in-store shopping, assuming they were even open,, and very high prices for delivery. Thus, Amazon was an easy choice. It was even easier and safer in several cases to buy from Amazon and have them ship to my daughter, than send her things I already had, when they were inexpensive.
That has definitely changed some recently, as more local stores have opened with special hours for high risk individuals, easier online purchasing and safer pickup in store procedures, and better safety procedures when shipping items. However, the ability to shop wihile feeling safe is still beyond some of the smaller local merchants, and a number have closed.
Re: Perfect Storm for Amazon
Feel for mom n pop at this time.
Helping customers?
"AWS salespeople are helping customers as they try to find ways to reduce their cloud spending."
Helping by telling them "Just sign here and we'll take care of everything. Think of the IT personnel you won't need anymore."