By
Chimamanda U. Martha
March 11th, 2024
Amazon reported a whopping 100% in its net income YoY and a 40% jump in its revenue. The company’s grocery sales tripled during Q2 2020 due to massive online shopping demands fuelled by the COVID-19-related government lockdowns.
America’s e-commerce retail giant Amazon.com Inc (NASDAQ: AMZN) continues with its winning streak for the second quarter of 2020. On Thursday, July 30, Amazon reported its Q2 2020 earnings with double-digit revenue growth YoY, beating street expectations. The company reported its biggest profits in the 26-year history, thanks to the government lockdowns imposed due to the coronavirus pandemic.
Amazon Q2 2020 revenue stood at $88.9 billion. Also, the company’s net income stood at a whopping $5.2 billion in Q2 2020. This is a whopping 100% rise from the $2.6 billion net income in Q2 last year. The company reported a revenue of $10.30 per share against the analysts’ expectations of $1.46. Also, note that the $5.2 billion net income comes after deducting $4 billion in expenses that Amazon spent for protective gear for its staff and other additional expenses.
While other businesses have been feeling the heat of slowdowns, Amazon saw a massive influx of online orders. In recent months, Amazon has hired an additional workforce of 175,000 people. During the Q2 2020, Amazon’s online grocery sales tripled year-over-year. At the same time, the company’s grocery delivery capacity has also jumped by 160%.
In a statement to the press, Amazon CEO Jeff Bezos said:
“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe”.
During the earnings call, Amazon CFO Brian Olsavsky told that the company had to secure additional capacity in its fulfillment centers due to massive demand. Just to give an idea, Amazon pulled “capacity we didn’t think we’d need until 2021,” he said. Amazon’s Prime Day shopping event which happens in mid-July will now move to the fourth quarter. The company is now preparing itself for November’s peak holiday season.
AMZN Stock Jumps 5% after Amazon Reveals Q2 Results
In the after-market trading on Thursday, the AMZN stock price jumped over $150 or 5% to $3,204.60. On Thursday closing, Amazon (AMZN) stock with the company market valuation standing tall at $1.52 trillion.
The AMZN stock has already appreciated by more than 60% so far and could possibly move north from here. While Amazon’s revenue continues to soar higher, its one-two day deliveries have been impacted due to the lockdown. The company is slowing getting back on track and improve upon this during Q3 and Q4. Amazon CFO Brian Olsavsky told CNBC:
“As we move into Q3, we need to build more inventory for Q4. We’ve got our hands full on that challenge, but we’ve got a really good team that’s been working very hard probably since late February on this issue.”
Apart from the e-commerce business, Amazon’s cloud computing wing – Amazon Web Services (AWS) – reported a 29% YoY growth in revenues. For Q2 2020, Amazon’s revenues stood at $10.81 billion. The company said: “Customers are using AWS to lessen the impact of the COVID-19 crisis on families, communities, and businesses”.
While all seems to be hunky-dory for the world’s biggest e-commerce giant, it continues to face inhouse challenges with warehouse workers. The friction between the company and its warehouse workers is on the rise. The employees showed their dissatisfaction with Amazon’s protection handling capabilities against COVID-19. Amazon said that it plans to spend upwards of $2 billion during Q3 to tackle Coronavirus-related challenges.