Why Amazon’s Q2 Is So Shocking
After markets closed on Thursday, e-commerce giant Amazon reported second-quarter earnings per share of $10.30 and $88.91 billion in revenue. The consensus estimates called for $1.46 in EPS and $81.53 billion in revenue.
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Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) released second-quarter financial results after markets closed Thursday. The e-commerce empire said that it had $10.30 in earnings per share (EPS) and $88.91 billion in revenue, compared with consensus estimates that called for $1.46 in EPS and $81.53 billion in revenue. In the same period of last year, Amazon reported $5.22 in EPS and $63.4 billion in revenue.
During the most recent quarter, the company spent over $4 billion on incremental COVID-19-related costs to help keep employees safe and deliver products to customers. Management also noted that it is paying a “special thank you bonus” of over $500 million to front-line employees and delivery partners.
Since March, Amazon has created over 175,000 new jobs and is in the process of bringing 125,000 of these employees into regular, full-time positions.
Amazon Web Services (AWS) revenues increased 29.0% to $10.81 billion, up from $8.38 billion in the same period of last year, with operating income of $3.36 billion.
In its other segments Amazon reported:
- North American net sales increased 43.4% to $55.44 billion, with an operating income of $2.14 billion.
- International sales increased 38.5% to $22.67 billion, with operating income of $345 million.
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As for guidance, the company expects to see net sales in the range of $87.0 billion to $93.0 billion, with operating income in the range of $2.0 billion to $5.0 billion in the third quarter. The consensus estimates call for $4.37 in EPS on $86.29 billion in revenue for the quarter.
On the books, cash and cash equivalents totaled $27.51 billion at the end of the quarter, versus $23.51 billion at the end of the same period last year. Operating cash flow increased 42% to $51.2 billion for the trailing twelve months versus $36.0 billion in the same period last year. At the same time, free cash flow increased to $31.9 billion, compared with $25.0 billion.
Shares of Amazon closed Thursday at $3,051.88, in a 52-week range of $1,626.03 to $3,344.29. The consensus price target is $3,102.76. Following the announcement, the stock was up about 5% at $3,190.01 in the after-hours session.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
