If there̵7;s one thing Amazon’s third-quarter earnings emphasize, it’s that coronavirus didn’t hit all retailers the same way. The e-tail giant went bankrupt in 2020, and even for analysts predicting big results for the third quarter, the final numbers could have dropped a lot.
The results beat all-time estimates, with 37% growth in revenue and earnings per share exceeding expectations, largely due to its e-commerce business.
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During the three-month period that ended September 30, the company posted revenue of $ 96.1 billion. Net income reached $ 6.3 billion, or $ 12.37 a share, tripled to $ 2.1 billion, or $ 4.23 in EPS, it’s up at this point. last year.
Analysts predict revenue of $ 92.71 billion and EPS of $ 7.41.
CEO Jeff Bezos explains in a statement, “We see more customers shopping earlier than ever to buy their holiday gifts, which is just one of the signs that This will be an unprecedented holiday season. “
The pandemic coronavirus effectively inhibited physical shopping, flooded online consumers, increased e-commerce, mobile and social activities, and caused a frenetic growth to reinforce these behaviors.
Perhaps most notable is that the Q3 figures don’t even include Prime day sales. Amazon postponed its annual shopping event from July to October, and soon followed by a Holiday Dash sale that left consumers – including more than 150 million Prime subscribers – buying early for the season. Peak.
“Amazon generated explosive sales growth in the third quarter despite the lack of an Official Date, making the yearly comparison murky. However, we note that retail sales in North America increased by 8% compared to Q2 2020, and margins actually improved by around 10%. [basis points]”This is impressive given the increased costs associated with generating these revenues,” said Charlie O-Shea, vice president and retail analyst at Moody’s.
“More specifically, shipping costs have increased by $ 1.4 billion since [the second quarter]and over 5 billion dollars annually, with [third-quarter] Year 2019 includes both the Official Date and [third-quarter] By 2020, the percentage of retail sales will increase to nearly 18%, ”he said.
That gives Amazon plenty of reason to believe that Q4 – including Prime Day results – will be unmatched.
During Thursday’s earnings call, Brian Olsavsky, chief financial officer, noted that third-party sellers were active during Prime Day. These merchants, consisting mainly of small and medium businesses, “thrived on Prime Day, with third-party sellers recording more than $ 3.5 billion in revenue at today’s global event. now, ”he said.
The company is “investing heavily” to support third-party sellers in general, Olsavsky continued, reporting that more than half a million sellers are having record sales in Amazon stores this year.
Q4 is expected to see a significant increase in the e-commerce sector. Adobe expects e-commerce to hit $ 189 billion during holidays, up 33% year-on-year, while Shopify reports that 97% of Black Friday / Electronic Monday shoppers stay in The US is planning to shop online that weekend.
If Amazon’s fourth-quarter revenue guidance is to be believed, the company will claim a huge chunk of that activity: Over the next quarter, Amazon’s instructions ranged from $ 112 billion to $ 121 billion, considering homeowners’ expectations. analysis is $ 112.7 billion as the floor or minimum.
According to Episerver, a digital experience and commerce solutions company, Amazon will have an increasingly larger share of the holiday market, with 11% of consumers planning to buy all of their holiday gifts. over their market this year. And customer experience platform Iterable reports that 35% of consumers say they plan to shop on Amazon this season more than in previous years.
That could bode well for their business profits, but Amazon warns that fourth quarter operating profits will likely suffer due to COVID-19 costs associated with them, estimated to be 4 billion. USD. That is expected to drop the company’s operating profit from $ 1 billion to $ 4.5 billion, missing an expected $ 5.81 billion.
Elsewhere in the Amazon empire, its cloud business was nearly as good as analysts had expected, with Amazon Web Services reaching $ 11.6 billion in revenue. Its “other” segment – which includes Amazon’s advertising business – generated $ 5.4 billion in revenue, a 51% jump from the same period last year.
There’s at least part of the report that has brought the pandemic challenges a little closer to the tech giant: Like most brick-and-mortar stores, its in-store sales fell 10%. down to 3.78 billion USD.
In other comments, Bezos stressed that Amazon increased its minimum wage to $ 15 across the US two years ago, and noted that it created more than 400,000 jobs this year. Amazon’s total workforce has now broken the 1 million people threshold, at 1.13 million, up 50% from last year.
“We continue to focus on enhancing the safety of our employees, especially in our operations and logistics, to help ensure the safety and well-being of our employees and partners. we, as well as our employees and customers, shop at Whole Foods Market and our stores, ”Olsavsky said.
According to Amazon, engagement is on the rise and shows people are “buying more often and across more categories,” the chief financial executive added, and they’re leveraging digital benefits, including including Prime Video and other online services. “We think that will be of long-term value.”
Amazon’s results as part of Thursday’s rushing after-sales earnings report that big tech is an economic force to be reckoned with, despite the pandemic (and even as major players increasingly Appears under an antitrust microscope).
• Alphabet, the parent company of Google, boosted its quarterly revenue by 14% to $ 46.2 billion.
• Facebook’s revenue increased 22% to $ 21.2 billion.
• And Apple’s highest revenue inched 1% to $ 64.7 billion and the company looks optimistic in its new product notes.