On Thursday, Amazon.com Inc posted the biggest profit in its 26-year history as online sales and its lucrative business supporting third-party merchants surged during the coronavirus pandemic.
Amazon’s shares, who is also the world’s largest online retailer, had risen upto 5% in after-hours trade.
While rival brick-and-mortar retailers have had to shut stores during government-imposed lockdowns, Amazon hired 175,000 people in recent months and saw demand for its services soar. The company said revenue jumped 40% from a year earlier to $88.9 billion.
Amazon had forecast it might lose money in the just-ended second quarter because it expected to spend some $4 billion on protective equipment for staff and other expenses related to COVID-19. It did just that – and still earned $5.2 billion – double its net income from a year prior.
Jeff Bezos, who founded the company in July 1994 and is the world’s richest person, said in a statement, “This was another highly unusual quarter.”
Amazon’s shares had risen by more than 60% this year, adding to the wealth of Bezos, its biggest stockholder. The S&P 500 is virtually flat.
Jesse Cohen, senior analyst at investor.com had stated Amazon’s business model sets it up “to expand its e-commerce dominance even more broadly as the global COVID-19 pandemic continues to flare.”
Online instore sales had jumped upto 48% to $45.9 billion in the second quarter. Meanwhile, merchants were paying Amazon more to fulfill and sponsor their products in order to reach the company’s loyal customers. That resulted in a 52% and 41% jump in seller services revenue and other revenue such as from ads, respectively.