- This week, Amazon.com, Inc. (NASDAQ: AMZN) reported its second fiscal quarter of 2020 and revenue was up 40% at $88.9 billion. The stock price of the company climbed over 5% this week as a result.
This week, Amazon.com, Inc. (NASDAQ: AMZN) reported its second fiscal quarter of 2020 and revenue was up 40% at $88.9 billion. Net income was $5.2 billion for the quarter. Sales in North America increased 43% to $55.4 billion and international sales climbed 38% to $22.7 billion.
Amazon was expected to have a strong quarter during as the company revealed it was hiring hundreds of thousands of workers during the coronavirus pandemic in order to keep up with demand.
During the last quarter, Amazon revealed that it was going to incur $4 billion in costs related to the pandemic to help keep workers and products safer. And for the third quarter, Amazon is expecting to incur another $2 billion of costs due to the pandemic.
Amazon provided third-quarter revenue guidance at the range of $87 billion and $93 billion.
Grocery delivery capacity was increased by over 160%. And the number of grocery pickup locations tripled in the quarter in order to support customers during COVID-19.
Amazon also said that it donated over $10 million in PPE to Direct Relief and Feeding America. The PPE included 4.4 million masks and thousands of contactless thermometers.
“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe. As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand — purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners,” said Amazon CEO and founder Jeff Bezos in a statement. “We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions. And third-party sales again grew faster this quarter than Amazon’s first-party sales. Lastly, even in this unpredictable time, we injected significant money into the economy this quarter, investing over $9 billion in capital projects, including fulfillment, transportation, and AWS.”
In terms of Amazon Web Services (AWS), the cloud service hit the $10 billion milestone. However, AWS’ growth dropped to 29% — which is the first time that Amazon reported a growth rate of less than 30% since the numbers started being disclosed.
Amazon CFO Brian Olsavsky said that AWS is a $43 billion annualized run rate business and it is up nearly $10 billion in run rate in the last 12 months. Amazon’s subscription services — which includes Amazon Prime and the 150 million paid subscribers — increased 29% to $6.02 billion.
The “other” category — including the company’s advertising operations — surged 41% to $4.22 billion in revenue.
Disclosure: I own a small number of Amazon shares.