Amazon, whose operations have been put to an extreme test during the coronavirus outbreak, posted mixed first-quarter earnings after the close of trading Thursday.
Founder and CEO Jeff Bezos issued a strikingly assertive statement along with the the company’s earnings. He said the tech giant is “not thinking small” as it responds to COVID-19 and will plow billions of profits back into its efforts across the world. Three bullet-pointed pages of text at the top of the release highlighted initiatives across units like Whole Foods, delivery services, Alexa and many more.
Revenue rose 26% from the same quarter a year ago to $75.5 billion, ahead of expectations, and the revenue gain in the U.S. was even higher, up 29% to $46.1 billion. Earnings per share declined 31% to $5.01, well below analysts’ consensus forecast.
Shares in Amazon sold off in after-hours trading but have bucked the market’s broader selloff in recent months, hitting new highs and ended Thursday at $2,474 after establishing yet another all-time top.
“From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” Bezos said in the earnings release. “Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money. If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.”
Instead of booking a projected $4 billion operating profit in the second quarter, Bezos said the company will spend that amount or more on COVID-related measures for employees and customers.
Bezos, who has been more of a Hollywood fixture of late, has reportedly become more directly involved in the day-to-day operations of Amazon.
The billions in spending, he went on “includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities. There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.”
Amazon has incurred criticism for its warehouse conditions and its treatment of workers during the crisis, but its earnings release asserted that wages, overtime pay and overall staffing are all up. Pay increases for workers during the pandemic is expected to total $700 million by May 16.
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