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Amazon promised to spend all its profits, but pandemic sales grew too fast and still made billions

Amazon.com Inc. CEO Jeff Bezos promised to dedicate all the additional profits that his company would have made to a massive increase in sales related to the COVID-19 pandemic, but he didn’t expect sales to grow as fast as she.

Amazon AMZN,
+ 0.60%
reported second-quarter earnings of $ 5.2 billion, or $ 10.30 per share on Thursday afternoon, nearly doubling from $ 5.22 per share a year ago amid a massive sales increase. Amazon reported revenues of $ 88.9 billion, up 40% from $ 63.4 billion a year earlier and well ahead of the forecast of $ 75 billion to $ 81 billion. Analysts had forecast earnings of $ 1.48 per share on average on revenues of $ 81.45 billion.

Three months ago, Bezos said he expected to spend billions on new business profits pouring in, as Americans would remain sheltered locally because the corona virus buys more goods online and companies spend more on cloud computing to support workers who stay at home. “If you’re a shareholder in Amazon, you might want to take a seat because we don’t think small,” Bezos said in May.

However, shareholders did not run away. Amazon’s stock, instead, continued to hit record highs, gaining more than 24% in the past three months and pushing the company’s market cap to over $ 1.5 trillion. Shares rose by more than 4% in hours after trading on Thursday after the results were published.

“This was another very unusual quarter, and I couldn’t be more proud and grateful for our employees around the world,” Bezos said in Thursday’s announcement. “As expected, we spent over $ 4 billion in incremental COVID-19 related costs in the quarter to protect workers and deliver products to customers in times of high demand – buying personal protective equipment, cleaning up our facilities , following new safety process paths, adding new family care backup benefits and paying a special thank-you bonus of over $ 500 million to frontline workers and delivery partners.

The gains in Amazon’s core business show why investors are staying with Amazon and joining more. The company said its e-commerce business was up 47.8% from last year in the second quarter, to $ 45.9 billion from $ 31.05 billion, while analysts expected $ 39.89 billion . In North America, net sales grew online and at physical Amazon stores such as the Whole Foods Markets chains, from $ 38.65 billion a year ago to $ 55.44 billion, while sales abroad grew from $ 16. 37 billion to $ 22.67 billion.

Amazon Web Services, the company’s cloud computing arm, saw sales rise from $ 8.38 billion to $ 10.8 billion, while analysts expected an average of $ 11 billion. As usual, AWS was the largest profit factor for Amazon, with an operating profit of $ 3.36 billion, while Amazon reported an overall operating profit of $ 5.84 billion.

Even before the pandemic, Amazon had spent ramping up its logistics operations to enable faster shipping for customers of its Prime subscription service, and COVID-19 has pushed that spending streak to hyperdrive. Amazon now has more than 1 million employees, Bezos revealed in planned testimonials for an antitrust hearing on Wednesday before a Congressional subcommittee, but since many are still listed as temporary, Amazon reported the number on Thursday at 876,800.

Amazon said it expects current quarter earnings to be between $ 87 and $ 893 billion, and learned from its previous expectations to expect profit, predicting $ 2 to $ 5 billion in operating profit while accounting for $ 2 billion in costs associated with COVID- 19.