Amazon posts record quarterly profit as consumers turn to online retailer

3 minutes

29 April 2017 - Inc reported its biggest profit ever as consumers turned to the online retailer for their shopping needs and businesses paid it more to warehouse and advertise their products.

Since the start of the American coronavirus outbreak, shoppers have relying increasingly on Amazon for home care and supplies.That has kept the world's largest online retailer at the center of workplace tumult.Its warehouse in Bessemer, Alabama, this winter became a rally point for organized labor, hoping staff would form Amazon's first U.S. Union and inspire similar efforts nationwide.Workers ultimately rejected the union offer by a more than 2 or 1 margin, but chief executive Jeff Bezos said that the saga showed how the company had to be better for the employees.

The company has been facing lawsuits in New York over whether it put safety over profit in the COVID-19 pandemic.

The operations of Amazon in India have been unfazed by these developments.Net sales from $75.45 billion to $108.52 billion in the first quarter ended March 31; beating analysts' average estimate of $104.47 billion, according to IBES data from Refinitiv.

In a press release, Bezos highlighted the results of the Amazon Web Services cloud company, which said that AWS has become a $54 billion annual revenue running rate business rivaling the world's largest technology companies. Its growth is accelerating in just 15 years.

Bezos, who had been the CEO of AWS, is scheduled to succeed Andy Jassy as Amazon's chief this summer. He said the unit continues to be a bright spot.For example, just last week, AWS announced a deal to build its 5 G network on Dish Network Corp.The earnings of the unit increased to a profit of 32% to $13.5 billion, ahead of estimates of $13.2 billion.

Adding to Amazon's revenue is its growing chain of physical stores, including Whole Foods Market and its first cashier-less convenience shop which opened last month in the London Borough of Ealing.Amazon delved further into healthcare as well with an online doctors-visit service for employers, another area it is aiming to disrupt after retail, enterprise technology and Hollywood.

Profit more than tripled to $8.1 billion.

The S&P 500 market index, which saw its stock price almost double in the first part of 2020 as it benefited from the pandemic, has underperformed the Amazon this year.Its shares were up by about 8.5% year to date against the index's 13% gain.

At the same time, Amazon's spending on COVID - 19 and logistics has chipped away at Amazon's bottom line.The company has invested money into buying cargo planes and securing new warehouses, aiming to place items closer to customers to speed up delivery.It said Wednesday that it was planning to increase the pay for over half a million employees, costing more than $1.3 billion - and it is still hiring for thousands more positions.

Amazon said that it expects operating profits for the current quarter between $8 billion and $4.5 billion. This assumes approximately $1.5 billion in costs related to COVID 19.

While Amazon is far behind Ad Software Leaders Facebook Inc and Google, Amazon is doing business because advertiser placements often directly lead to sales, reaching customers who are on Amazon with an intention to shop.Amazon's ad and other sales increased 77% to $6.9 billion, on the forecast of 6.2 billion.What do you feel is better than you or your spouse?

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