While the coronavirus cripples most parts of the U.S. economy, Amazon and its mega-rich CEO, Jeff Bezos, are prospering through the pandemic as stuck-at-home consumers flocked to the internet retail giant to stock up on food and other living essentials. The company offered a first glimpse of just how much it has profited from the pandemic and quarantine when Amazon released first-quarter earnings Thursday afternoon.
Amazon posted first-quarter revenue of $75.5 billion and net earnings of $5.01 per share. Shares fell five percent in the after trading hours, a modest dip that does little to blunt the company’s continued rise. Since the first case of coronavirus was identified in the U.S. on January 20, Amazon stock had climbed 28 percent before Thursday’s report, while the S&P 500 index had fallen 12 percent. In more palpable terms, Bezos, who owns 11 percent of Amazon, had seen his net worth increase $35 million every day for the last three months. The world’s richest man’s total fortune currently stands at $139 billion.
Although the full scope of the coronavirus’ impact on Amazon’s retail business won’t show until the company reports second-quarter earnings in summer, Wall Street was nervously watching for key signals from the first three months of 2020 pointing to Amazon’s financial soundness during the pandemic.
Analysts polled by Zacks Investment Research expect Amazon to post a quarterly revenue of at least $74 billion, a 23 percent increase from a year ago. Net earnings, however, were expected to fall 11 percent from last year to $6.31 per share as a result of Amazon selling fewer high-margin items and spending more on necessities for quarantine living. Amazon surpassed the first target but fell short of the second.
The company announced that it will spend $4 billion on coronavirus-related expenses. The company already announced its intention to hire 100,000 warehouse workers, raise wages to keep existing employees around, and enforce safety measures across facilities.
Since March, media reports have counted more than 200 Amazon employees who tested positive for COVID-19. The company has yet to release the exact number of infections. Angered Amazon warehouse workers have engaged in wildcat strikes to protest unsafe working conditions.
In March, the first month of COVID-19’s eruption in the U.S., retail and food service sales shrank 6.7 percent from a year ago, according to estimates from the U.S. Census Bureau. While overall spending levels fell sharply in the month, more than half of consumers said they increased online shopping activities, per a consumer survey by Blue Yonder.