Jeff Bezos says Amazon could LOSE money this quarter as he commits to spending $4 billion on coronavirus-related costs and tells shareholders ‘you may want to take a seat’
- Amazon reported earnings for the quarter ended in March on Thursday
- Jeff Bezos said coronavirus spending could exceed $4 billion in second quarter
- Profits are down despite soaring revenue in the coronavirus pandemic
- Amazon plans to hire 175,000 workers and raise wages by $2 for hourly workers
- Outraged employees have been demanding better protections
- Here’s how to help people impacted by Covid-19
Amazon on Thursday warned that it could post a loss in the second quarter as it tacked on about $4 billion in costs related to the coronavirus pandemic, sending its shares down 5 percent in after-hours trading.
For the quarter ended in March, Amazon’s revenue rose by 26 percent from last year, to $75.45 billion, as the retail giant recorded a surge in demand for online orders of essential goods during pandemic.
However, profits were down 30 percent from the same period last year amid higher spending, with earnings per share of $5.01 missing Wall Street expectations of $6.25 per share.
The e-commerce giant has been spending heavily to keep up with a surge in online orders. Amazon had earlier said it would hire about 175,000 workers and raise wages by $2 for hourly workers as well as overtime pay, which would increase expenses by nearly $700 million.
‘If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,’ Amazon CEO Jeff Bezos said in a press release
Amazon stock plunged in after-hours trading on Thursday as the company said that profits shrunk in the first quarter, and that it could post a loss in Q2
‘If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,’ CEO Jeff Bezos said in a press release.
‘Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,’ Bezos continued.
‘But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.’
Amazon forecast operating income in the range of a loss of $1.5 billion and profit of $1.5 billion for the second quarter. Analysts were expecting operating income of $3.80 billion, according to research firm FactSet.
The company forecast net sales in the range of $75 billion to $81 billion for the second quarter. Analysts were expecting revenue of $77.99 billion, according to IBES data from Refinitiv.
Net sales rose to $75.45 billion from $59.70 billion in the first quarter ended March 31, as the retail giant recorded a surge in demand for online orders of essential goods during the COVID-19 pandemic.
Analysts had expected revenue of $73.61 billion, according to IBES data from Refinitiv.
Two people wearing masks walk near an Amazon Go store on Thursday in Seattle. For the quarter ended in March, Amazon’s revenue rose by 26 percent from last year, to $75.45 billion, as the retail giant recorded a surge in demand for essential goods in the pandemic
If comes after a group of activists vandalized the road outside Bezos’s $23 million home in Washington DC on Wednesday, demanding better coronavirus protections for Amazon workers.
Protesters scrawled ‘Protect Amazon Workers’ in giant red, yellow and white paint in the middle of a street, with the hashtag ‘#ForUsNotAmazon’ alongside.
The huge graffiti, which stretched across the width of the road, depicted Amazon employees wearing protective face masks.
It took around an hour to create the mural on Wednesday that called for workers at the online retailer to receive more personal protective equipment (PPE).
Police were at the scene, but kept their distance from the group of nine demonstrators, said to be from the Shutdown DC climate movement and Virginia immigrant rights group La ColectiVA.
It is not known if Bezos, 56, or his fiancee Lauren Sanchez, 50, were at the residence at the time, but there was ‘no movement’ seen from his home.
A message painted by activists on the street outside of one of the personal residences of Amazon founder Jeff Bezos in Washington DC yesterday
Lauren Sanchez,50, and Amazon founder and CEO, Jeff Bezos, 56, at the Amazon Prime Video celebration in Mumbai, India, in January
On Tuesday it emerged workers at Amazon, Instacart, Whole Foods, Walmart, Target and FedEx are seeking better health and safety standards as well as hazard pay for working during the pandemic.
They are planning a joint walkout on May 1, International Workers Day, to protest against companies that they say have disregarded the health and safety of essential workers while earning record profits.
The union-backed workers’ coalition is demanding:
– Compensation for all unpaid time off used since the beginning of the Covid-19 crisis in March
– Hazard pay or paid sick leave to be provided for the duration of the pandemic
– Protective equipment and all cleaning supplies to be provided at all times by the company and a
– ‘Full corporate transparency’ on the number of cases in facilities
Amazon says the unions are exaggerating the problems. The company says temperature checks and face masks are already standard for its staff on the front lines of the coronavirus outbreak.
‘While we respect people’s right to express themselves, we object to the irresponsible actions of labor groups in spreading misinformation and making false claims about Amazon during this unprecedented health and economic crisis,’ an Amazon spokesman told DailyMail.com.
Huge graffiti depicting Amazon employees wearing protective face masks was scrwaled acros the road outside the Washington home of Jeff Bezos on Wednesday
Gerard Tuzara, center, an operations manager at a fulfillment center in Southern California died from the virus on March 31
‘The statements made are not supported by facts or representative of the majority of the 500,000 Amazon operations employees in the U.S. who are showing up to work to support their communities. What’s true is that masks, temperature checks, hand sanitizer, increased time off, increased pay, and more are standard across our Amazon and Whole Food Market networks already,’ the spokesman added.
‘Working globally with our teams and third parties we have gone to extreme measures to understand and address this pandemic with more than 150 process changes to-date. We spend every day focused on what else Amazon can do to keep our people and communities safe and healthy’
Dave Clark, Amazon’s senior vice president of worldwide operations, said the company has prioritized worker safety and changed more than 150 processes to do so. To promote social distancing, Amazon has already staggered warehouse work start times and ended stand-up meetings during shifts.
‘Nothing is more important to us than making sure that we protect the health of our teams,’ Clark said .
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