Corona keeps fueling Amazon’s success
The eCommerce giant reported record quarterly results for the second time in a row amid pandemic
In April, when Amazon CEO Jeff Bezos announced his company’s Q1 results, he asked shareholders to “take a seat” before he told them that he was going to invest all operating profit expected for the upcoming second quarter (US$4 billion at the time), in anti-COVID-19 actions. Despite these billion-scale reinvestments in security, logistics and health measures, the reported Q2 profit now still amounted to a total of US$5.2 billion. In other words, Amazon’s results blew expectations for the second time in a row thanks to the unbroken demand in online services that the coronavirus pandemic has brought about.
Amazon’s net sales amounted to US$88.9 billion in the second quarter of 2020, which by far exceeded April expectations (US$75 – US$81 billion) and Q1 results (US$75.5 billion). Compared to Q2 2019, this means an increase of a whopping 40% – net sales then amounted to US$63.4 billion. Operating income in the past quarter came in at US$5.8 billion, compared to US$3.1 billion in Q2 2019 and US$4.0 billion in Q1 2020. Despite the billion-dollar investments in corona-related measures, net income increased to an overwhelming U$5.2 billion (Q2 2019: US$2.6 billion – Q1 2020: US$2.5 billion).
As far as the upcoming third quarter is concerned, Amazon is again optimistic. The company currently expects net sales to grow further by an estimated 24% to 33% compared to Q3 2019. This would result in an overall net sales volume between US$87.0 and US$93.0 billion for the quarter. As there is still a lot of uncertainty when it comes to the future impact of COVID-19 on Amazon’s business operations, the company expects to spend another substantial amount on corona-related measures in Q3 2020: Counting in further COVID-19-related costs of more than US$2.0 billion, Amazon expects Q3 operating income to settle at US$2.0 to US$5.0 billion.
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