Amazon easily topped second-quarter earnings and revenue forecasts after the market close Thursday, with CEO Jeff Bezos calling it “another highly unusual quarter” amid the current coronavirus pandemic.
“As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand—purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners,” said Bezos in a statement.
The e-commerce and web services titan has created over 175,000 new jobs since March, he added, and is in the process of making 125,000 of those employees full-time positions. Bezos also said that the company “injected significant money into the economy” in Q2, investing more than $9 billion into capital projects that include fulfillment, transportation and Amazon Web Services (AWS).
For Q2 of fiscal 2020, the company reported earnings of $10.30 per diluted share on revenue of $88.9 billion, versus analyst expectations of $1.46 EPS on $81.53 billion in revenue, according to Refinitiv.
Shares of Amazon stock shot up as much as 5% after the market close, after rising 0.6% during the regular trading session. The major indexes closed mixed, with the tech-heavy Nasdaq in the green ahead of Amazon, Apple, Facebook and Google parent Alphabet’s earnings reports.
Some analysts continued to anticipate Amazon benefiting from the ongoing coronavirus pandemic, which has confined millions in the U.S. and abroad to stay at home to avoid spreading COVID-19, prompting more e-commerce orders and in-home entertainment consumption.
Grocery delivery capacity spiked over 160%, and online grocery sales tripled in Q2, year over year. A “significant” portion of Zoom’s network relies on Amazon Web Services, said the company, a notable tidbit, given much of the working world’s reliance on video conferencing over the last four months.
During the June-ended quarter, Prime Video launched its Watch Parties feature, which allows Prime members to chat while watching Amazon’s video content, including TV and movies. It also debuted Prime Video Profiles so viewers can manage up to six profiles per account, allowing each profile to offer personalized recommendations. Greg Daniels’ series “Upload” and original films such as “Selah and the Spades,” “The Goldfinch,” “The Vast of Night,” “7500,” “My Spy,” and Indian titles “Ponmagal Vandhal” and “Gulabo Sitabo” debuted during the quarter.
In the previous quarter, in which shelter-at-home orders were first implemented, first-time Prime Video viewers nearly doubled and video rentals increased, with consumers relying on Amazon’s Alexa artificial intelligence more heavily for music and questions.
For the current quarter, Amazon is forecasting net sales of $87 billion to $93 billion, which would mark growth of 24%-33% from the prior-year third quarter, well above current analyst estimates for $86.29 billion. Operating income is expected to be between $2 billion-$5 billion, including more than $2 billion in COVID-19-related costs, per the company.
The Q2 earnings report follows Wednesday’s House antitrust hearing, which brought the CEOs of Amazon, Facebook, Apple and Google in front of the House Antitrust Subcommittee over concerns of anti-competitiveness. When asked about a Wall Street Journal report of Amazon accessing third-party seller data in order to develop competing Amazon-branded products, Bezos said that the e-commerce giant prohibits employees from using “seller-specific data to aid our private label business, but I can’t guarantee you that that policy has never been violated.”