The pandemic has been very profitable for Amazon.com Inc.
reported first-quarter earnings of $8.11 billion Thursday afternoon, trouncing expectations yet again as it continues to provide services greatly needed during the COVID-19 pandemic, namely e-commerce and cloud computing. In the 12 months ending March 31, comprising most of the pandemic’s effects in the U.S. and areas other than China, Amazon collected net income of about $26.9 billion.
That is more than Amazon’s profits from the previous three full years, 2017 through 2019, which totaled roughly $24.7 billion. And those three years were Amazon’s most profitable in its history, after the company focused more on growth than earnings for decades as it built out its warehousing and logistics systems for delivering goods sold on its website as well as its data-center network for Amazon Web Services’ cloud-computing offering.
Amazon reported first-quarter earnings of $15.79 a share, more than triple the $5.01 a share recognized in the same period a year ago, when the COVID-19 pandemic had just started causing shelter-in-place restrictions in the U.S. Sales grew to $108.52 billion from $75.45 billion the year before. It was Amazon’s second consecutive quarter of more than $100 billion in revenue, after never previously hitting that mark, and the company expects to top the mark again in the current quarter.
Analysts on average expected Amazon to report earnings of $9.54 a share on sales of $104.51 billion, according to FactSet. Shares gained more than 5% in after-hours trading immediately following the release of the results, after closing with a 0.4% gain at $3,471.31. The stock has gained 46.5% in the past 12 months, as the S&P 500 index
has gained 42.3%.
The current quarter is expected to be the final full period for Amazon with founder Jeff Bezos at the helm. Three months ago, Amazon announced that Bezos would depart as chief executive in the third quarter to become executive chairman of the company, while AWS CEO Andy Jassy takes over the lead role for the whole company. Bezos released his final annual letter as CEO earlier this month, revealing that Amazon had topped 200 million subscribers to its Prime service and detailing a more intense focus on employee welfare.
For the second quarter, Amazon forecast sales of $110 billion to $116 billion, while analysts on average were projecting revenue of $108.49 billion, according to FactSet. While there have been concerns that vaccinations and a subsequent reopening economy could move those sales elsewhere, analysts don’t seem concerned about that possibility.
“While we continue to hear about inconsistent consumer data points heading into 2Q, we believe a combination of stimulus money, learned e-commerce behaviors and advertising strength should more than offset the expected impact of reopening, which we suspect will be less than anticipated regardless,” Benchmark analysts wrote in a preview of Thursday’s report.