Amazon profits double despite Covid-19 impact

Amazon has reported a massive surge in profits for the second quarter of the year as it revealed that net income doubled from $2.6bn (£1.9bn) to $5.2bn (£3.9bn), despite the impact of Covid-19.

It comes after it reported that net sales increased by 40% to $88.9bn (£67.6bn) in the second quarter, compared with $63.4 (£48.2bn) the previous year.

Revenue from Amazon Web Services (AWS) also increased by 29% to $10.81bn (£8.2bn) which it attributed to customers using AWS to “lessen the impact of the Covid-19 crisis on families, communities, and businesses”.

Amazon added that it incurred costs of $4bn (£3bn) in its incremental Ccovid-19 related initiatives to “help keep employees safe, provide additional compensation to employees and delivery partners, and deliver products to customers”.

Looking ahead the online retail giant expects Net sales to be between $87bn (£66bn) and $93bn (£70bn) or to grow between 24% and 33% compared with Q3 2019. Operating income is also expected to be between $2bn (£1.5bn) and $5bn (£3.8bn), compared with $3.2bn (£2.4bn) the previous year. It added the guidance assumes more than $2bn of costs related to Covid-19.

Jeff Bezos, Amazon founder and CEO, said: “This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe.

“As expected, we spent over $4bn in incremental Covid-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand—purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500m to front-line employees and delivery partners.”

He added: “We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full- time positions. And third-party sales again grew faster this quarter than Amazon’s first-party sales.

“Lastly, even in this unpredictable time, we injected significant money into the economy this quarter, investing over $9bn in capital projects, including fulfillment, transportation, and AWS.”