Amazon Gains Strength as Coronavirus Boosts Shopping, Cloud Services
30 Luglio 2020 - 11:46PM
Dow Jones News
By Sebastian Herrera
Amazon.com Inc. said sales and profits soared in the second
quarter as shoppers inundated the company's site with orders and
employees working from home around the world powered growth in its
cloud-computing unit.
Revenue grew 40% to $88.9 billion for the quarter ending June
30, propelled by a flood of customers who have relied on online
shopping more than ever during the pandemic. Analysts polled by
FactSet had expected sales of $81.4 billion. Profits doubled to a
record $5.2 billion, far exceeding analyst expectations.
The extent of the company's success came as a surprise even for
investors who had expected Amazon to do well. The Seattle tech
giant struggled in March and April as the economic shutdown took
hold across the country, spending more than $4 billion on
coronavirus-related costs. Amazon hired hundreds of thousands of
workers, boosted pay and took dozens of steps to ensure warehouse
safety after facing early criticism from some employees.
Amazon's workforce now exceeds 1 million people and it is the
second-largest employer in the U.S. after Walmart Inc. The company
has emerged as one of a handful of corporations that have seen
sales increase during the pandemic, which has ravaged U.S. markets.
Like Walmart and Home Depot Inc., customers have flocked to Amazon
for essential goods even as the company struggled to keep up with
demand in the early days of the public-health crisis.
The e-commerce pioneer has seen its shares surge by more than
60% this year, more than double the increase for other tech giants
such as Apple Inc. and triple that of retailers that have largely
kept stores open such as Home Depot, according to FactSet.
"We don't know when we will recover out of this Covid crisis,
but one thing that is certain is that these [shopping] trends are
taking hold, and that's why more and more people are hiding in
Amazon," said Hari Srinivasan, a portfolio manager at Neuberger
Berman Group LLC, which owns roughly $1.8 billion worth of Amazon
shares.
Amazon's shares rose about 4.6% in after-hours trading on
Thursday to about $3,200. The company's overall costs jumped by
37.7% to $83 billion. Its world-wide shipping costs grew to $13.7
billion, a 68% year-over-year increase.
"If you're a shareowner in Amazon, you may want to take a seat,"
Chief Executive Jeff Bezos said in April as Amazon warned that it
could lose money in the second quarter as a result of
coronavirus-related costs like increased wages. He said those costs
exceeded $4 billion for the quarter. Amazon plans to keep most of
the 175,000 workers it hired in recent months. For a period of
about 10 weeks, it was paying workers an extra $2 an hour.
In addition to an increase in labor costs, Amazon has also added
safety measures at its hundred of facilities, installing physical
barriers between workers and purchasing 1,000 thermal cameras and
millions of masks. The company is also seeking to build out its own
coronavirus-testing capabilities.
Amazon said it expects third-quarter sales between $87 billion
and $93 billion. It projected its operating income to be between $2
billion and $5 billion, compared with operating income of $3.2
billion a year earlier. The Prime Day shopping extravaganza, which
typically occurs during the third quarter and gives Amazon a boost
during the lull of the summer shopping season, has been moved to
the fall.
In a press call Thursday, Chief Financial Officer Brian Olsavsky
said that Amazon's profit was helped by sales of more profitable
items on its website and that the company was able to ship a
greater number of products than it had anticipated. He said the
company expects to spend roughly $2 billion in coronavirus-related
costs during the third quarter.
Amazon's earnings came a day after Mr. Bezos made his first
appearance before Congress as part of a federal inquiry into the
market power of the nation's largest technology companies.
Mr. Bezos faced questions about Amazon's impact on small
businesses selling on its site, including revelations in a Wall
Street Journal article that Amazon uses data from sellers to form
its private-label products.
Mr. Bezos, who was also asked about counterfeit items on Amazon
and how it has undercut smaller rivals by using its pricing powers,
broadly defended Amazon's business practices and highlighted its
relatively small size in the overall retail sector. The CEO also
said the company continues to investigate the allegations made in
the Journal article.
Despite the troubles in Washington and the effect of the virus
on Amazon's business, investors who see the pandemic as a
short-term problem have remained more confident than ever in the
company's long-term prospects. The company's market value now
exceeds $1.5 trillion and is in a range that could soon topple
Apple as the world's most valuable company.
Amazon's earnings were among a wave of strong results from
big-tech companies, especially those whose businesses have been
lifted by the swell in stay-at-home workers. Facebook Inc. said
profits nearly doubled to $5.1 billion in the quarter. Samsung
Electronics Co. said quarterly profits rose about 7%. Last week,
Microsoft Corp. reported strong sales growth propelled by sustained
demand in its cloud-computing business.
Amazon's business units outside of e-commerce have continued to
drive profits. Sales at Amazon's web-services division grew 29% to
$10.8 billion, helped by millions working from home. Zoom Video
Communications Inc. hosts a significant portion of its network on
Amazon's cloud service, called Amazon Web Services.
The company's business unit that includes its advertising
operations saw sales surge 41% to $4.2 billion. Amazon's
advertising unit has grown rapidly and is one the top digital
advertising companies in the world, selling ad space in the form of
sponsored products in search and display.
Operating income surged 37% in its North America unit, where
most of its e-commerce operations are focused. Amazon's
international business swung to a gain of $345 million. Sales fell
13% in its physical-store unit, which includes Whole Foods
Market.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
(END) Dow Jones Newswires
July 30, 2020 17:31 ET (21:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Grafico Azioni Amazon.com (NASDAQ:AMZN)
Storico
Da Feb 2024 a Mar 2024
Grafico Azioni Amazon.com (NASDAQ:AMZN)
Storico
Da Mar 2023 a Mar 2024