Amazon’s Q1 profits more than triple in pandemic spending surge

Amazon posts four record quarterly profits in a row

Amazon has posted record profits for the pandemic period and claims that consumers will keep shopping online.

Since the start of the pandemic shoppers have increasingly relied on Amazon for delivery of home staples, and the company sees this trend continuing post-pandemic, especially in the grocery segment. 

Amazon has posted four record quarterly profits in a row, attracted more than 200 million Prime loyalty subscribers, and recruited over 500,000 employees to keep up with surging demand.

The company said it expects operating income for the current quarter to be between $4.5bn and $8bn (€6.6bn, £5.7bn), which includes about $1.5bn in costs related to Covid-19.

Amazon's first quarter-profit more than tripled to $8.1bn from a year ago on sales of $108.5bn, ahead of analysts' estimates.

Meanwhile company founder Jeff Bezos, who is stepping down as CEO this summer, has praised the results of the company's cloud computing unit, Amazon Web Services.

In a statement he said: "In just 15 years, AWS has become a $54bn annual sales run-rate business competing against the world's largest technology companies, and its growth is accelerating."

Amazon announced a deal for Dish Network Corp to build its 5G network on Amazon Web Services last week. The division increased revenue 32% to $13.5bn, ahead of analysts' average estimate of $13.2bn, according to IBES data from Refinitiv.

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Brian Olsavsky, Amazon's chief financial officer, said businesses increasingly wanted to outsource their technology infrastructure to AWS.

"We expect this trend to continue as we move into the post-pandemic recovery," he said.

Adding to Amazon's second-quarter revenue will be the company’s Prime Day. The event will take place in June rather than July to reach customers before they go on vacation.

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

Shares rose 4% in after-hours trade.

FURTHER READING: Amazon expands grocery delivery service to more than 5,000 US cities

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