Amazon Earnings Smash Forecasts in ‘Highly Unusual Quarter’ Amid Pandemic

Amazon easily topped second-quarter earnings and revenue forecasts after the market close Thursday, with CEO Jeff Bezos calling it “another highly unusual quarter” amid the current coronavirus pandemic.

“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 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.”

For Q2 of fiscal 2020, the company reported earnings of $10.30 per diluted share on revenue of $88.9 billion, versus analyst expectations of $1.46 EPS on $81.53 billion in revenue, according to Refinitiv.

Shares of Amazon stock shot up over 4% after the market close, after rising 0.6% during the regular trading session. The major indexes closed mixed, with the tech-heavy Nasdaq in the green ahead of Amazon, Apple, Facebook and Google parent Alphabet’s earnings reports.

Some analysts continued to anticipate Amazon benefiting from the ongoing coronavirus pandemic, which has confined millions in the U.S. and abroad to stay at home to avoid spreading COVID-19, prompting more e-commerce orders and in-home entertainment consumption.

First-time Prime Video viewers nearly doubled and video rentals increased in the previous quarter, with consumers relying on Amazon’s Alexa artificial intelligence more heavily for music and questions.

The Q2 earnings report follows Wednesday’s House antitrust hearing, which brought the CEOs of Amazon, Facebook, Apple and Google in front of the House Antitrust Subcommittee over concerns of anti-competitiveness. When asked about a Wall Street Journal report of Amazon accessing third-party seller data in order to develop competing Amazon-branded products, Bezos said that the e-commerce giant prohibits employees from using “seller-specific data to aid our private label business but I can’t guarantee you that that policy has never been violated.”