Amazon has joined Netflix, Alphabet, Facebook, Apple and Microsoft in confirming that they not only continue to ride out the pandemic and its aftermath in grand style, but are now value stocks for the continuing strong growth in earnings.
All five have seen record rises in revenue and earnings and, although Netflix disappointed with weak subscriber numbers, the other four all surprised on the upside in revenue, earnings and other metrics.
Amazon completed the reporting week for the five on Thursday with a huge result that saw the shares jump more than 4% at one stage after hours after the company released its first-quarter earnings, beating Wall Street’s expectations for earnings and revenue. The shares dipped late in the after-hours session to be up 3.5%.
Amazon said revenue surged 44% to $US108.52 billion from $US75.5 billion a year ago and quarterly profit tripled to $US8.1 billion.
Sales in its core North America markets rose 40% to $US64.4 billion from $US46.1 billion in the first quarter of 2020.
Investors sparked to the results, sending Amazon shares up 4% in after-hours trading to record territory.
But there was a weakness – physical stores revenue, which includes Whole Foods Market and other brick-and-mortar offerings like Amazon Books outlets, again fell. Sales slumped 16% to $US3.9 billion because of the lingering impact of lockdowns in some parts of the US – New York and Los Angeles.
During the quarter, Amazon’s sales grew faster internationally than they did in North America. International revenue surged 60% year over year, more than any other segment, while North America revenue climbed 40%.
International revenues jumped 60% in the quarter.
Amazon Web Services saw net sales of $US13.5 billion during the quarter, up 32% year over year. Amazon doesn’t disclose advertising sales, but it’s included in the company’s “Other” category, which saw its revenues grow 77% year over year to $US6.9 billion
Amazon’s guidance for the second quarter suggests that it expects the momentum to continue, despite the increasingly tough comparison with the strong three months to June in 2020.
The company expects to post revenue between $US110 billion and $US116 billion, topping market estimates around $108 billion.
As expected, Amazon will incur fewer costs this year related to coronavirus safety measures. Operating income is forecast to be between $4.5 billion and $8 billion in the second quarter, assuming $1.5 billion of costs related to Covid-19.
That’s what the company forecast three months ago at the previous quarter’s release.
Amazon revealed this week it will spend $US1 billion on giving half a million of its US employees a pay rise.
