Amazon’s Income Doubles in Q2, Fueled by Pandemic Shopping
Amazon had its best quarter ever this spring, fueled by demand for online shopping during the coronavirus pandemic.
The company’s profits doubled to $5.2 billion in the second quarter, up from $2.6 billion in the same period last year, according to the company’s earning results. Revenue came in at $88.2 billion, up from $63.4 billion last year, and higher than the fourth quarter of 2019.
The company has seen “elevated demand” since March, said Amazon CFO Brian Oslavsky on the earnings call. “People are relying on online shopping more than ever.”
But it wasn’t only online sales. The number of streaming hours doubled, grocery sales tripled, and subscriptions to Amazon’s Prime membership were up 29 percent.
Generally the second quarter is the slowest, and sales peak around the holidays, Oslavsky said, so Amazon is ramping up its capacity in order to meet the elevated demand from the pandemic, along with the busier retail seasons of the fall and winter, Olsavsky said.
Amazon hired 175,000 workers since March, and plans to hire 125,000 of them full time, per the call.
In terms of space, Amazon spent $9.4 billion on capital expenditures and leases in the second quarter alone. “This year, we expect a meaningfully higher year-over-year square footage growth of approximately 50 percent,” Oslavsky said on the call, compared with 15 percent in 2019.
Amazon says they spent $4 billion on COVID-related expenses during the second quarter, including PPE, facility cleaning, social distancing measures, and increased pay for employees, and plan to spend another $2 billion in the third quarter.
There were some challenges facing the company. Amazon’s one-day and two-day shipping is still experiencing delays, production at Amazon Studios is severely limited, and its AWS service saw an increase of 29 percent, slower growth than previously.