Amazon is one of the biggest winners of the pandemic. The company announced record profits on Thursday and said that consumers will continue to spend in the growing US economy and it is unlikely that they will switch to online shopping.
Since the coronavirus outbreak, shoppers have increasingly relied on Amazon to provide household necessities, and the company believes that this trend continues after the pandemic, especially in the grocery market.
While the physical store is closing, Amazon has now set record quarterly profits for four consecutive quarters, attracted more than 200 million Prime loyalty subscribers, and recruited more than 500,000 employees to keep up with growing demand.
Amazon said that it expects its operating income for the quarter to be between US$4.5 billion (approximately Rs 33,380 crore) and US$8 billion (approximately Rs 59,350 crore), including approximately US$1.5 billion (approximately Rs 113.1 crore). the cost of. -19.
The stock rose 4% in after-hours trading.
Throughout the pandemic, the world’s largest online retailer has been at the center of workplace turmoil. Organized laborers tried to unionize the Amazon warehouse in Alabama with the New York lawsuit and failed, trying to put it above profit. Not the safety of employees.
Amazon’s business is largely unaffected by development. Michael Pachter, an analyst at Wedbush Securities, said that the surge in Prime subscriptions, consumer love for grocery delivery during COVID-19, and economic improvements are beneficial to Amazon.
“Habits. Good groceries. Stimulate inspections,” Pachter said. “They will flourish.”
Pachter said that compared with the previous quarter, the slowdown in sales growth during the current period reflects a more difficult situation compared to last year, when the lock-in was in full swing.
CEO Jeff Bezos praised the results of the company’s cloud computing division Amazon Web Services (AWS) in a press release. He said: “In just 15 years, AWS has become an annual sales of 540 The billion-dollar business competes with the world’s largest technology companies, and its growth is accelerating.”
These compliments are a tribute to Andy Jassy, AWS’ long-time head of cloud business, who will succeed Bezos as CEO of Amazon this summer. Last week, Amazon announced a deal with Dish Network to build a 5G network on AWS. The revenue of the division increased by 32% to US$13.5 billion (approximately 100.51 billion rupees), higher than analysts’ average estimate of US$13.2 billion. (Approximately Rs.). According to Refinitiv’s IBES data, the figure is 9792 million).
Amazon CFO Brian Olsavsky (Brian Olsavsky) said that companies increasingly want to outsource their technology infrastructure to AWS.
He said: “As we enter the recovery after the pandemic, we hope this trend will continue.”
Amazon’s revenue in the second quarter will increase Prime Day, the company’s annual marketing boom. Amazon revealed that the event will be held in June (not July) (which is usually the case) in order to attract customers before they take a vacation.
The fixed grocery sales of Whole Foods Market, an Amazon subsidiary, are still a bright spot. Olsavsky called the grocery store “a good revelation in the post-pandemic period.”
The company’s first-quarter profit more than tripled over the same period last year, reaching US$8.1 billion (approximately Rs 60,900 crore) and sales of US$108.5 billion (approximately Rs 80,486 crore), exceeding analyst expectations.
Advertising sales growth
Thanks to the pandemic, Amazon’s stock price almost doubled in the first half of 2020. However, this year, it has not performed as well as the Standard & Poor’s 500 Index. So far, its stock price has risen about 8.5%, while the index has risen by 13%.
Spending on COVID-19 and logistics has cut Amazon’s bottom line. The company has invested money to purchase freighters and secure new warehouses, aiming to place items closer to customers in order to speed up delivery. The company said on Wednesday that it plans to increase the salaries of more than 500,000 employees, cost more than US$1 billion (about Rs 74.10 billion), and is still hiring tens of thousands of positions.
Olsavsky said Amazon is still working to restore the one-day package delivery rate to pre-pandemic levels.
He told reporters that the company also plans to increase spending on video content this year. Olsavsky said that consumers have been watching content on Amazon for longer.
Although Amazon is far behind advertising sales leaders Facebook and Alphabet’s Google, it is developing its advertising business because the location of the brand usually directly leads to sales, thus attracting Amazon customers who intend to shop.
Investing.com senior analyst Jesse Cohen said: “In addition to core retail and cloud businesses, advertising revenue is increasingly becoming another substantial growth driver for Amazon.”
Amazon said that advertising and other sales increased by 77% to US$6.9 billion (approximately Rs 51,175 crore), higher than the US$6.2 billion (approximately Rs 45,980 crore) expected by analysts.
Thomson Reuters 2021 ©