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| Posted: 12 June 2020 at 08:28 | IP Logged
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Amazon's earnings report for Q1 2020
Amazon reported its first-quarter earnings on Thursday
after the bell.Amazon's sales grew faster than expected
as more people shopped online amid COVID-19.But it missed
on earnings as COVID-19-related costs across the supply
chain increased.Amazon shares dropped about 5% in after-
hours trading.Visit Business Insider's homepage for more
stories.To get more news about
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¡¡¡¡Amazon reported huge growth in first-quarter revenue
but a miss on earnings on Thursday.The mixed results show
how the coronavirus outbreak is leading to more shoppers
on Amazon, albeit at an increased cost as the company is
dealing with a number of costly changes, including supply
chain lockdowns and warehouse safety upgrades.Amazon
stock is down about 5% in after-hours trading.Here are
the most important numbers:
¡¡¡¡Q1 EPS (GAAP): $5.01 versus expectations of $6.27 per
shareQ1 Revenue: $75.5 billion versus expectations of
73.74 billionAmazon Web Services: $10.22 billions versus
expectations of $10.29 billionAmazon CEO Jeff Bezos said
in an unusually long statement that the epidemic is
causing a lot of uncertainties, adding that the company
expects to spend all of the $4 billion it's projected to
make in second-quarter profits on COVID-19-related
expenses.
¡¡¡¡¡°If you're a shareowner in Amazon, you may want to
take a seat, because we're not thinking small,¡± Bezos
said in a statement. ¡°Under normal circumstances, in
this coming Q2, we'd expect to make some $4 billion or
more in operating profit. But these aren't normal
circumstances. Instead, we expect to spend the entirety
of that $4 billion, and perhaps a bit more, on COVID-
related expenses getting products to customers and
keeping employees safe.¡±Amazon clearly saw a massive
demand surge as more people bought things online to avoid
physical stores during the pandemic. The 26% revenue
growth exceeds street estimates of 22%. Paid unit growth
jumped 32%, up from last year's 10% growth rate. Even its
¡°Physical Stores¡± sales, which includes Whole Foods
revenue, grew 8% from last year, an unusual spike for a
segment that hovered around 1% growth in the past
year.Meanwhile, costs increased as Amazon had to put
additional safety measures and pay raises across its
warehouses. Amazon is hiring 75,000 more warehouse and
delivery drivers, after having added 100,000 new
employees since March. Shipping costs also jumped 49% to
$10.9 billion. Operating income dropped $400 million from
last year to $4 billion for the quarter.Amazon's cloud
service continues to be a the company's main profit-
driver. It reported $3 billion in operating profit,
accounting for 77% of Amazon's total operating profit.
Meanwhile, AWS crossed the $10 billion quarterly revenue
mark for the first time, growing 33% from last year.
¡¡¡¡Despite concerns of the pandemic causing less
spending on Amazon's advertising service, the segment saw
a 44% sales increase to $3.9 billion in the quarter,
showing little impact on one of its fastest growing
business segments.Amazon's stock hit record highs earlier
this month, and was up almost 30% year-to-date, far
outpacing the broader market.
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Topic: Amazon’s earnings report for Q1 2020
