Bussiness

Amazon posts record profits as coronavirus keeps shoppers online

Amazon reported blowout sales and profits on Thursday as coronavirus lockdowns had shoppers turning to their phones to buy everything from diapers to groceries.

The Seattle-based e-tailing giant — whose billionaire boss Jeff Bezos was just grilled on Capitol Hill Wednesday by top lawmakers probing the company’s competitive practices — shattered Wall Street’s expectations for the quarter, reporting earnings of $10.30 a share, towering over analysts’ expectations for just $1.46 a share.

Amazon’s revenue clocked in at $88.9 billion — also beating forecasts of $81.2 billion amid 40-percent year-over-year sales growth.

The shopping titan’s sales make up roughly half of all online retail sales, according to Statista, which in turn make up 14 percent of all retail sales in the US, according to recently-released data from the Department of Commerce.

Amazon shares in after-hours trading jumped 5.5 percent to $3,219.79, adding roughly $8 billion to Bezos’ net worth, which was $182 billion at Thursday’s close.

For Bezos to become the first person with a net worth of $200 billion, Amazon’s stock would need to climb just over $3,400. He currently leads No. 2 richest man Bill Gates by $69 billion.

Amazon has been a major beneficiary of the pandemic, which has Americans increasingly shunning brick-and-mortar stores in favor of home delivery.

“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe,” Bezos said in a statement, adding that Amazon has created “over 175,000 new jobs since March” and is working to turn 125,000 of the workers into full-time employees.

The company’s Amazon Web Services cloud computing business missed forecasts, however, bringing in $10.8 billion in revenue versus the predicted $11 billion, representing year-over-year growth of 29 percent.

The stock is up more than 30 percent since its last earnings report at the end of April, and more than 70 percent since Covid-19 related lockdowns began in the United States in March.

The company forecasted revenue between $87 billion and $93 billion next quarter, beating the Street’s expectations of $86.5 billion. It also said it expects to continue to spend big on coronavirus-related expenses, including protective equipment for its workers.

Amazon now projects to spend an extra $2 billion in the third quarter on top of the $4 billion that Bezos last quarter warned investors Amazon would be spending on safety measures to protect its massive workforce. Those investments have included personal protective equipment for its hundreds of thousands of employees, “enhanced cleaning” of its facilities, higher wages for hourly workers as well as “hundreds of millions” of dollars to develop its coronavirus testing capabilities.

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