Amazon is one of few companies to benefit from the coronavirus pandemic-induced boom in online shopping (and general online services). The company’s shares went up almost 4 percent on Thursday after putting out the figures for first quarter earnings. Amazon’s figures for earnings and revenue for the first quarter have surpassed Wall Street’s expectations. The company earnings amounted to $15.79 per share and the value for revenue was $108.52 billion. The expected figures for earnings and revenue were $9.54 per share and $104.47 billion respectively. Amazon’s earnings and revenue therefore shows that the company has more than managed to scale the hurdles brought about by the pandemic, and has in fact benefited from the adverse effects of the pandemic.
There are fears by investors that the success recorded in the first quarter might not continue in the second quarter. Although investors are afraid that business could slow down as the effects of the pandemic and lockdowns begin to reduce but Amazon assures investors that the success recorded amidst the strains caused by the pandemic will continue in the second quarter. While Wall Street’s expectation for revenue in the second quarter is projected at $108.6 billion, Amazon says it expects value for revenue to be between $110 billion and $116 billion in the second quarter. The company is sure that the trend of shoppers relying on it for delivering of groceries and staples will continue even after the pandemic slows down or comes to an end.
Another reason why the company might be so sure of a better second quarter is that the company’s Prime Day is scheduled to happen in June and will likely boost year-on-year comparisons for revenue in the second quarter. The Prime Day was scheduled for later this year but was brought forward to June. “In many areas, July is a vacation month, so it might be better for customers, sellers and vendors to experiment with a different time period. We believe that it might be better timing later in the second quarter, so that’s why we’re testing it this year”, Brian Olsavsky; CFO Amazon explained to investors.
Amazon’s advertising and cloud-computing businesses were not left out of the boom. Net sales for Amazon Web Services stood at $13.5 billion and was up 32 percent year-on-year. The company did not reveal the figures for advertising sales; it was grouped under the category of ‘Other’ which had a 77 percent growth year on year to $6.9 billion.
“As Prime Video turns 10, over 175 million Prime members have streamed shows and movies in the past year, and streaming hours are up more than 70 percent year over year”, CEO Jeff Bezos revealed in a statement.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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