Amazon’s net sales rose 26% to $75.5 billion in the first quarter, exceeding Wall Street’s expectations as people around the world relied on the company’s massive e-commerce infrastructure during the COVID-19 crisis.
But profits also fell more than 30% to $2.5 billion, or $5.01 per share, as the costs of scaling up for the pandemic weighed on the Seattle tech giant’s bottom line.
And the company made it clear that it’s only getting started — telling shareholders that it will spend $4 billion in the current quarter on initiatives related to COVID-19.
“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,” Amazon CEO Jeff Bezos said in a lengthy statement in the company’s earnings news release.
The 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.
Under normal circumstances, he said, the company would expect to make $4 billion or more in operating profit in the second quarter, ending June 30.
“But these aren’t normal circumstances,” he said. “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 has grown to more than 935,000 employees worldwide, including 95,000 new hires in just the past few weeks, quickly rendering the number in its first-quarter earnings report out of date as it grows in response to the global pandemic.
For the second quarter, ending June 30, the company says net sales should come in between $75 billion and $81 billion, growing between 18% and 28%, with operating income ranging from a loss of $1.5 billion to a profit of $1.5 billion.
Bezos said Amazon’s spending on COVID-19 initiatives will include “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.”
For the first quarter, Wall Street analysts were expecting net sales of $73.61 billion and profits of $6.25 per share.
Amazon Web Services posted net sales of $10.2 billion, an increase of nearly 33 percent from a year ago, and profits of more than $3 billion.
