Amazon Gains Strength as Coronavirus Boosts Shopping, Cloud Services
30 Juli 2020 - 11:05PM
Dow Jones News
By Sebastian Herrera
Amazon.com Inc. said sales and profits soared in the second
quarter as shoppers inundated the company's site with orders and
employees working from home around the world powered growth in its
cloud-computing unit.
Revenue grew 40% to $88.9 billion for the quarter ending June
30, propelled by a flood of customers who have relied on online
shopping more than ever during the pandemic. Analysts polled by
FactSet had expected sales of $81.4 billion.
Profits doubled to a record $5.2 billion even as Amazon spent
more than $4 billion on coronavirus-related costs, hiring hundreds
of thousands of workers, increasing pay and taking dozens of steps
to ensure warehouse safety after facing early criticism from some
employees. Amazon's workforce now exceeds 1 million people and it
is the second-largest employer in the U.S.
Amazon has emerged as one of a handful of companies that have
seen sales increase during the pandemic, which has ravaged U.S.
markets. Like retail giants such as Walmart Inc. and Home Depot
Inc., customers have flocked to Amazon for essential goods even as
the company struggled to keep up with demand in the early days of
the viral outbreak.
The Seattle ecommerce pioneer has seen its shares surge by more
than 60% this year, more than double the increase for other tech
giants such as Apple Inc. and triple that of retailers that have
largely kept stores open such as Home Depot, according to
FactSet.
"We don't know when we will recover out of this Covid crisis,
but one thing that is certain is that these [shopping] trends are
taking hold, and that's why more and more people are hiding in
Amazon," said Hari Srinivasan, a portfolio manager at Neuberger
Berman Group LLC, which owns roughly $1.8 billion worth of Amazon
shares.
Shoppers have visited Amazon in record numbers, and the company
has also seen growth in its web-services division as millions of
workers stay home and their employers make greater use of cloud
computing.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
(END) Dow Jones Newswires
July 30, 2020 16:50 ET (20:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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