Amazon (NASDAQ: AMZN), the titan of e-commerce, was at the forefront of the astonishing stock market rally following the March lows. Today, the company is once again in the spotlight as it reports its second-quarter 2020 earnings.
Amazon revealed the long-awaited numbers a few moments ago and painted a dramatically rosy picture.
Amazon Q2 2020 Scorecard
For the three months ended June 30, 2020, Amazon reported revenues of $ 88.9 billion, up 40 percent from the comparable quarter last year. Keep in mind that the company had led quarterly revenues of between $ 75 billion and $ 81 billion when it reported its Q1 2020 earnings.
(All figures are in billions of dollars)
As for Amazon’s business segments, online stores and third-party vendors registered the biggest jump in growth.
(All actual figures are in billions of dollars; all growth figures are percentage changes from the comparable quarter last year)
Amazon made $ 31.9 billion in free cash flow from a 12-month backlog
(All figures are in billions of dollars and represent the 12-month period prior to the relevant quarterly earnings)
Finally, Amazon reported earnings per share of $ 10.3, exceeding consensus expectations by a whopping $ 8.68. This equates to a net income of $ 5.2 billion.
(All figures are in dollars and represent EPS calculated on an adjusted diluted basis)
As for guidance, Amazon expects to generate between $ 87 billion and $ 93 billion in revenue in the third quarter of 2020, which translates into annual growth ranging from 24 percent to 33 percent compared to the third quarter of 2019. In addition, the e-commerce giant expects its operating income to fluctuate between $ 2 and $ 5 billion for the relevant quarter.
Amazon shares responded positively to the earnings report, posting gains of more than 6 percent in after-hours trading. Keep in mind that on July 10, the stock recorded its all-time highest closing price of $ 3,200. So far, Amazon shares have now risen 60.8 percent based on Thursday’s closing price.
It should be noted that Amazon’s AWS showed slower growth compared to consensus expectations. Nonetheless, the company continues to take advantage of the persistent pandemic coronavirus paradigm (COVID-19), which demonstrates continued strength in e-commerce and AWS segments as online sales grow and cloud adoption accelerates. Please note that the company revealed in its Q1 2020 earnings that during the relevant quarter it would incur approximately $ 4 billion in costs related to the corona virus pandemic (COVID-19), which would be a modest headwind cause. Given today’s earnings announcement and Q3 guidance, it is reasonable to conclude that Amazon’s coming quarter will remain strong.
Refresh Amazon received a street high target of $ 3,800 on July 20 from two Wall Street heavyweights – Goldman Sachs (NYSE: GS) and Jeffries. The matching nature of these projections has only contributed to increasing the likelihood that Amazon has reached the stated elevated price target, increasing investors’ euphoria. Both Goldman Sachs and Jeffries cited optimism about Amazon’s Q2 2020 earnings as a major contributor to the upgrade.