Amazon (AMZN) posted second-quarter earnings on Thursday that shattered Wall Street estimates, fueled by consumer trends during the coronavirus pandemic that have catapulted the tech giant to one of the biggest beneficiaries of the crisis.
The company’s results are even more impressive given that it acknowledged having spent more than $ 4 billion during the quarter on costs related to COVID-19. Here are the results compared to the consensus estimates compiled by Bloomberg:
Performance for the quarter was driven by operating cash flow that increased 42% to $ 51.2 billion in the past twelve months, compared to $ 36.0 billion in the same period last year. Net sales soared 40% compared to $ 63.4 billion a year ago, and Amazon Web Service (AWS), the company’s massive cloud operation, saw growth of 29%.
Patrick Moorhead, president and chief analyst at Moor Insights and Strategy, noted that AWS growth during the quarter was “greater than the full annual revenue of many cloud games.” AWS is on track to create a $ 40 billion annualized revenue company. This makes AWS bigger than Salesorce.com and SAP. “
Meanwhile, Amazon also said it invested more than $ 9 billion in capital projects, and saw its grocery delivery capacity soar by more than 160% amid a triple increase in online grocery sales during the trimester.
“We have created more than 175,000 new jobs since March and are in the process of taking 125,000 of these employees to regular full-time positions,” CEO Jeff Bezos said in a statement.
“And third-party sales again grew faster this quarter than Amazon’s third-party sales. Finally, even in this unpredictable time, we injected significant money into the economy this quarter, investing more than $ 9 billion in capital projects, including compliance, transportation and AWS, “he added.
The stock, which recovered by more than 6% in after-hours trading, has been on a break since the coronavirus pandemic resulted in widespread blockades, with consumers at home turning to the website to meet their needs. To date, Amazon has recovered by more than 63%, far exceeding the S&P 500 index.
Amazon has made multiple consecutive record closings, along with the other cohorts within the high-flying “FAANG” technology actions including Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Google (GOOG ) of Alphabet.
Based on the company’s third-quarter guidance, net sales for the next quarter are expected to reach between $ 87 billion and $ 93 billion, a 24% -33% gain from the comparable period in 2019. The Coronavirus-related spending exceeds $ 2 billion in the third quarter, Amazon said, on operating income expected to fall within the range of $ 2 billion to $ 5 billion.
Daniel Salmon, analyst at BMO Capital Markets, which ranks Amazon at n. # 4 among a “mega peck order” for major stocks, he said this week that the “long-term opportunity for stocks is stronger than ever, and we also continue to see superior performance in the next 12 months.”
However, he added that the bank was “cautious” given the recent surge and Amazon’s potential to increase investment spending.
The second-quarter report comes immediately after Bezos, the world’s richest man, who testifies before Congress for the first time on Wednesday afternoon. The billionaire, who can usually control the narrative about the technology and the retail giant, found himself on the defensive after being asked about Amazon’s use of third-party vendor data.
When asked if customer information is used for the benefit of Amazon, Bezos said the company restricts this, but added: “I cannot guarantee that the policy has not been violated,” a response that caught the attention of participants in the market.
