Amazon Earnings Miss in Q1; Flags Massive Covid-19 Expenses Ahead
Investing.com
Published Apr 30, 2020 04:03PM ET
Amazon.com Earnings Miss, Revenue Beats In Q1
Investing.com - Amazon.com (NASDAQ:AMZN) on Thursday said it would spend its entire second-quarter profit on Covid-19 related expenses after the e-commerce giant reported first-quarter earnings that missed analysts' forecasts and revenue that topped expectations.
Amazon.com shares lost 4.5% in after-hours trade following the report.
In a blow to margins, the company said it would spend its second-quarter profit on Covid-19 related expenses.
"Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. 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," said CEO Jeff Bezos in a statement.
"This includes 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," Bezos added.
Amazon.com announced earnings per share of $5.01 on revenue of $75.45 billion. Analysts polled by Investing.com anticipated EPS of $6.34 on revenue of $72.9 billion.
That compared wtih an EPS of $7.09 on revenue of $59.7 billion in the same period a year before. Amazon.com had reported EPS of $6.47 on revenue of $87.44 billion in the previous quarter.
Total revenue in North America was $46.1 billion, above consensus estimates of $44.3 billion, while international revenue was inline with Wall Street forecasts at $19.1 billion.
Amazon Web services, its cloud business, reported revenue of $10.2 billion, just below consensus of $10.3 billion consenses.
Looking ahead, the company guided second-quarter revenue within a range of $75 billion to $81 billion, compared with consensus estimates of $76.57 billion.
"The current crisis has separated Amazon from the rest of the pack," Investing.com analyst Haris Anwar said. "Even with the economy slipping into a deep recession and unemployment rates surging, consumers are flocking to Amazon to buy essential health and household products."
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Written By: Investing.com
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