Amazon Q2 earnings blow past estimates because buying Coronavirus increases revenue, profits

Amazon (AMZN) posted second-quarter earnings on Thursday, which blew Wall Street projections over consumer trends during the coronovirus epidemic that misled tech giants into one of the crisis’s biggest beneficiaries .

The company’s results are even more impressive as it has accepted more than $ 4 billion in expenses during the quarter on costs related to COVID-19. Here are the results compared to the consensus estimate compiled by Bloomberg:

Quarterly performance was boosted by increasing cash flow by 42% to $ 51.2 billion for the twelve months to $ 36.0 billion compared to a year earlier. Net sales increased 40% compared to $ 63.4 billion a year earlier, and Amazon’s Web Services (AWS) – the company’s large-scale cloud operation – saw a 29% increase.

Patrick Moorehead, president and principal analyst at Moore Insights and Strategy, said AWS growth during the quarter was “larger than the entire annual revenue of many cloud plays.” AWS is on its way to creating an annual, $ 40B revenue company. This makes AWS larger than and SAP. “

Meanwhile, Amazon also said it pledged more than $ 9 billion in capital projects, and saw its grocery delivery capacity grow by more than 160% amid a three-fold increase in online grocery sales during the quarter.

CEO Jeff Bezos said in a statement, “We have created more than 175,000 new jobs since March and are in the process of moving 125,000 employees to regular, full-time positions.”

“And third-party sales again rose faster this quarter than Amazon’s first-party sales. Finally, even in this unpredictable time, we injected significant money into the economy this quarter, $ 9 billion in capital projects. Invested more, including fulfillment, transportation and AWS, ”he said.

The stock – which made more than 6% cry in after-hours trading – has been on a tear since the coronovirus epidemic, resulting in massive lockdowns, with domestic consumers coming to the website for their needs. Year after year, Amazon rallied over 63%, outpacing the S&P 500 index.

According to data from Bloomberg’s Billionaires Index, Amazon’s results raised the total wealth of Bezos, the world’s richest man, from $ 10 billion to $ 189.5 billion.

Amazon has set off several consecutive records – with other peers within high-flying “FAANG” tech stocks including Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX and Alphabet’s Google (GOOG) Huh) .

According to the Q3 guidance provided by the company, net sales for the next quarter are expected to test between $ 87 billion to $ 93 billion, a 24% – 33% gain over the comparable period in 2019. Coronavirus-related spending is seen topping nearly 2 billion. In Q3, Amazon said, on operating income that is expected to fall within the $ 2 billion to $ 5 billion range.

Daniel Salmon, an analyst at BMO Capital Markets that ranked Amazon at number 4 among the “mega cap pecking orders” of the top stocks, said this week that the stock’s “long-term opportunity is stronger than ever, and we continue to see it There will be better performance in the next 12 months. “

However, he said the bank was “cautious” given the recent increase, and gave Amazon the ability to reduce investment spending.

The Q2 report comes on the heels of Bezos, who testified before Congress on Wednesday afternoon. The billionaire, who is usually able to control the narrative on technology and retail behem, found himself defensive when asked about the use of third-party vendor data by Amazon.

Asked if customer information is used for the benefit of Amazon, Bezos said the company prohibits it, but added: “I cannot guarantee the policy is not violated” – a Feedback that raised eyeballs among market participants.

@TeflonGeek“data-reactid =” 40 “>Xavier David is an editor for Yahoo Finance. Follow her on Twitter: @TeflonGeek

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