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
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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.if you want know more,
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