Amazon Q1 2020 Earnings: Roaring Sales Overshadowed By Coronavirus Costs

Saturday, 02 May, 2020

The flood of online shopping during the pandemic is also creating supply shortages and forcing Amazon to delay deliveries, with orders often taking four days or longer to arrive at customer doorsteps.

That includes increasing spending on worker pay and safety precautions.

"If you're a shareowner in Amazon, you may want to take a seat, because we're not thinking small", he said, adding that the company would invest hundreds of millions of dollars to develop its own coronavirus testing capabilities.

The online giant is typically tight-lipped about its Amazon Advertising division, but in its latest earnings disclosure, in which the division is categorized as "other", it noted that quarterly revenues were up 44% coming in at $3.9 billion during the period.

Although many physical retail stores sell their own products alongside rivals on their shelves, Amazon is believed to have access to far more data, and many vendors have said that its size and power gives them no option but to sell on its marketplace.

The fact that Amazon is going to shell out $4 bln to combat COVID-19 also didn't sit well with the company's shareholders.

Revenue rose 26% from the same quarter a year ago to $75.5 billion, ahead of expectations, and the revenue gain in the USA was even higher, up 29% to $46.1 billion.

"Right now, things are still so up in the air that I can't really project when that day will be", said Brian Olsavsky, Amazon's chief financial officer. Last month social media firm Facebook said it is investing $5.7 billion for a 9.99 per cent stake in Reliance Jio Platforms. While growth has been slowing in recent quarters, it's still a $10 billion operation, cementing its place as a priority focus for Amazon.

If the news report is accurate, Amazon's statements to the committee "appear to be misleading, and possibly criminally false" or constituting perjury, said the letter to Bezos signed by the committee's chairman, Rep. Jerrold Nadler, D-N.Y., and others.

The bulk of the report covers the company's response to the pandemic, but elsewhere in the organization, Amazon Web Services continues to be big business.

Amazon (AMZN), the high-flying stock of 2020, has dropped 7.3 percent over the last 24 hours after revealing underwhelming Q1 earnings results.