Amazon crushes earnings and doubles its profit — it spent big, but it won bigger
The Empire strikes back... A day after Jeff Bezos got grilled by Congress, his ginormous baby Amazon reported expectation-smashing quarterly earnings. The Zon delivered big numbers:
- +100%: Amazon's quarterly profit doubled to $5.6B from last year. Even more impressive when you consider it spent $4B on COVID-related costs.
- +40%: Amazon's sales soared to a casual total of $89B. $50B came from products and $39B came from services (like AWS cloud computing and 3rd party seller plans).
- 175K: How many jobs Amazon created since March. That's almost double Delta's total number of employees.
It's surprising, but it's not... Amazon's expenses were up a massive $4B, which should have eaten into profits. But it still managed to double its profit because: almost every single one of Amazon's business lines directly benefited from the corona-conomy. Lockdowns and germ-avoidance hugely favored the Zon's businesses.
- Ecommerce: Amazon's 3rd party sales jumped 52% as sellers flocked online, and Amazon-owned sales popped 48%.
- Cloud: Amazon's AWS cloud brought in $11B on WFH cloud computing needs.
- Grocery: Amazon revved up grocery delivery capacity by 160% and tripled pickup locations on soaring demand.
- Streaming: Prime Video launched its Watch Parties social feature, after 1st time viewers nearly 2X'd in the previous quarter.
Amazon’s earnings just reinforce Congress’ argument... Wednesday, Jeff Bezos tried to convince Congress that Amazon faces real competition — in other words, that it's not a competitor-crushing monopoly. But its massive earnings suggest many Americans view it as a necessary platform, especially mid-pandemic. Many sellers see Amazon as their only option, since it controls ~40% of the US retail ecommerce market and reaches 82% of US households.