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| Amazon sales rose 37% beating expectations |
On Thursday, Amazon announced its financial performance for the third quarter of this year, which was better than expected with higher profits and a 37% increase in sales.
Amazon said fourth-quarter revenue would range from $ 112 billion to $ 121 billion, up from 28% to 38% year-on-year. Analysts forecast sales of $ 112.3 billion.
The company expects operating profit to range between $ 1 billion and $ 4.5 billion when the costs of the novel coronavirus (COVID-19) and COVID-19 are around $ 4 billion. This number is higher than last quarter when Amazon announced it was spending more than $ 2 billion on coronavirus measures.
“Most of these costs result from“ persistent flaws ”in the productivity of its warehouses, including: enforcement of social distancing rules, extended worker breaks, and other measures to ensure our safety, Brian Olsavsky, Amazon's chief financial officer, said in a conference call with analysts. The staff are away.Costs also include the investment in cleaning improvements and testing jobs.
However, Amazon remains one of the biggest beneficiaries of the pandemic as consumers flock to buy basic foodstuffs, groceries, and basic commodities. The cost of delivering these products to customers increased in the third quarter and increased 57% year-on-year to $ 15.1 billion.
As the holidays approach, Amazon is expected to face increased demand as shoppers buy gifts online rather than shopping.
Amazon CEO Jeff Bezos said in a statement, "We are seeing more and more customers buying Christmas gifts early. It's just a sign that this is going to be an unprecedented vacation."
Bezos has also sponsored the latest Amazon job creation and processing warehouse workers. He cited the $ 15 Amazon minimum wage and urged other major employers to "raise $ 15."
Amazon is one of the few companies that continues to grow its workforce amid the economic slowdown caused by the coronavirus. The company employs more than 1.12 million full-time employees worldwide, an increase of 50% over the previous year. This number does not include Amazon's network of contractors and agency workers.
FactSet data shows that Amazon Web Services' cloud computing division generated $ 11.6 billion in revenue for the quarter, up 29% in line with analyst expectations. The division's operating profit was $ 3.54 billion, beating expectations of $ 3.45 billion.
The "Other" category of the company mainly consists of promotional activities. Revenue grew 51% to $ 5.4 billion. Subscription services include: Prime members ’revenue increased 33% to $ 6.58 billion.
Sales of outside merchants increased by 55%, once again surpassing Amazon's core business, which increased sales by 38%. Amazon's retail division sales, including the whole foods market, fell 10%.