For the quarter ended in March, Amazon’s earnings rose by 26 percent from last year, to $75.45 billion, as the pandemic caused a surge in demand for online purchases. Nonetheless, revenue was down 30 percent from the same period last year amid higher spending, with earnings per share of $5.01 missing Wall Street expectations of $6.25 per share.
The surge in online shopping left the company facing additional expenses to be able to meet such high demand.
The e-commerce giant said it would hire about 175,000 workers and increase wages by $2 for hourly workers as well as overtime pay, which would increase expenses by nearly $700 million.
In a press release Amazon CEO, Jeff Bezos, stated: “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,
“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,
“But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”
Amazon predicted operating income in the range of a loss of $1.5 billion and profit of $1.5 billion for the second quarter.
Analysts were anticipating operating income of $3.80 billion, as reported by research firm FactSet.
The company forecast net sales in the range of $75 billion to $81 billion for the second quarter.
Analysts were expecting revenue of $77.99 billion, according to IBES data from Refinitiv.
Net sales increased to $75.45 billion from $59.70 billion in the first quarter ended March 31.
Analysts had expected revenue of $73.61 billion, according to IBES figures released by Refinitiv.
The news comes as demonstrators in Washington DC vandalised Jeff Bezos’ home to protest Amazon workers’ conditions and demand better personal protective equipment (PPE) for them.
The activists wrote “Protect Amazon Workers” in big red, yellow and white writing in the middle of a street, along with the hashtag “#ForUsNotAmazon”.
A union-backed workers’ coalition is planning to staged walkout on May 1, International Workers Day, to demand better working conditions as the company makes record earnings.
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Amazon denies the situation is so severe.
“While we respect people’s right to express themselves, we object to the irresponsible actions of labor groups in spreading misinformation and making false claims about Amazon during this unprecedented health and economic crisis,” an Amazon spokesman told DailyMail.com.
He added: “The statements made are not supported by facts or representative of the majority of the 500,000 Amazon operations employees in the U.S. who are showing up to work to support their communities.
“What’s true is that masks, temperature checks, hand sanitiser, increased time off, increased pay, and more are standard across our Amazon and Whole Food Market networks already,’ the spokesman added.
“Working globally with our teams and third parties we have gone to extreme measures to understand and address this pandemic with more than 150 process changes to-date.
“We spend every day focused on what else Amazon can do to keep our people and communities safe and healthy.”
According to Amazon’s senior vice president of worldwide operations, Dave Clark, the company introduced 150 measures to ensure workers’ safety.
Some of the prevention measures include staggered warehouse schedules and slashing stand-up briefings.
“Nothing is more important to us than making sure that we protect the health of our teams,” Mr Clark said.
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