Amazon Crushes Revenue As Online Sales, Prime Soar

Say that Amazon posted a good quarter on Thursday (July 30), it’s a bit like saying that Michael Jordan had a great career.

By any measure, the company earnings were off the charts, and they barely made it due to cost cutting. The company nearly doubled its revenue and profit while spending more than $9 billion on capital improvement projects.

Among those figures: Operating cash flow increased 42% to $51.2 billion from $36.0 billion in the second quarter of 2019. Net sales increased 40% to 88.9 billion, compared to $63.4 billion in the second quarter of 2019.

Operating profit rose to $5.8 billion in the second quarter from $3.1 billion a year ago, and net profit rose to $5.2 billion from $2.6 billion of dollars. Video hours on Amazon Prime have doubled. Online grocery sales have tripled.

Amazon also said it has created more than 175,000 new jobs since March and brought 125,000 of those people into full-time positions. The company now has more than one million regular and seasonal employees.

The company added that it had spent more than $4 billion in additional COVID-19-related costs for employee safety, employee bonuses and delivery costs. Other capital expenditures were for execution, transportation, and investments in Amazon Web Services. In fact, the company’s list of accomplishments for AWS filled two pages of its earnings press release.

When the results were called, the financial director Brian Olsavsky pointed out that the Q2 2020 figures exceeded those of Q4 2019 and that Q3 would be even more important.

“As a reminder, the fourth quarter is usually our most important quarter for retail. That’s not the case this year,” he said. “That means we can adapt to the space normally used for the second half of peak demand. Despite strong operating leverage in the second quarter, as we head towards a peak in the second half, we will further increase our space requirements and add significant distribution center and transportation capacity.

In other words: Amazon says it can do even better.

Part of the reason it crushed the second quarter, in addition to the overall digital shift caused by the pandemic, was Prime customers. Olsavsky didn’t detail any of the spending by Prime members or even say how many new customers joined through Prime. But he said the company continued to see high engagement from Prime members throughout the quarter, with Prime members shopping more frequently with larger baskets.

The third quarter forecast given by the company called for a 30-40% increase over 2019. This is proof that the company thinks the digital shift will last, but Olsavsky was coy.

“I think it’s hard to say, but we’re very encouraged that grocery delivery has resumed and it’s accelerated compared to what we… thought,” he said. declared. “And we’re certainly happy to be there for our Prime members who shop more frequently and shop more. We know there are other options, but they’re limited. Hopefully things like masks, gloves and cleaners are just one-time purchases, but we’ll see.



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