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“If you are an Amazon shareholder, you may want to sit down,” warns Amazon CEO Jeff Bezos in his first-quarter report: “Under normal circumstances, we would make approximately $ 4 billion in operating profit or more in the second quarter, but that’s not normal circumstances. We hope to spend the full four billion, and maybe a little more, on COVID. ” Safeguards, salary increases, additional employees, deliberately lower efficiency, building own capacities for crown trials, donations, free services for small businesses, and the firing of loan sharks cost billions.
According to their own statements, Amazon has already removed more than a million items because sellers wanted to benefit from the corona virus crisis with high prices. More than 10,000 vendors were blocked. The initial 100,000 additional employees now directed have now grown to 175,000, and the number will now increase. Salary increases alone will cost $ 700 million in mid-May.
Amazon builds its own COVID laboratory
And when Amazon buys something, it comes together quickly: As an example of measures to protect its own workforce, the company names 100 million protective masks, 1,000 thermal imaging cameras, and 31,000 thermometers that have already been purchased. The group donated 12,200 laptops to support American students. Aid organizations in Europe have sent Amazon € 21 million. And so on.
Additionally, Bezos has assembled a team of Amazon employees who are fully focused on creating their own crown testing capabilities. “The team is building their first lab and have started a pilot project to investigate (colleagues with customer contact),” says Bezos, “We are not sure how far we will go at the relevant time, but I think it is worth trying. ” In any case, lessons could be learned from the project.
Billing increases by a quarter
Amazon’s first-quarter revenue grew more than a fifth to $ 41.8 billion, and service revenue increased nearly a third to $ 33.6 billion. Overall, compared to Amazon’s first quarter of 2019 saw sales grow in a good quarter to $ 75.5 billion. At the same time, however, operating costs increased by more than 29 percent to 71.5 billion. As a result, operating profit has dropped nearly a tenth to $ 4 billion. Net income fell 29 percent to $ 2.5 billion.
And while Amazon Web Services is more profitable and the rest of the business in North America is still significantly profitable, international business losses have multiplied from $ 90 million a year ago to $ 398 million. While Amazon’s memory has suffered more than $ 5.7 billion in bloodshed in the first three months of the year, it is still full at more than $ 49 billion.
Unlike many other American companies, despite Corona, Amazon still ventures into an ordinary business outlook for the current quarter. Revenue is expected to increase from 18 to 28 percent to $ 75 to $ 81 billion. COVID-19 related spending is budgeted at $ 4 billion. This should result in zero operating profit, plus / minus one and a half trillion dollars. After Amazon’s share increased a good four percent over the course of Thursday, it sank five percent after quarterly after-hours trading figures were announced.
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