Amazon Announced Better-Than-Expected Revenue

Amazon Announced Better-Than-Expected Revenue

almost 4 years ago1 min

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“Alexa, tell Finimizers that Amazon announced better-than-expected quarterly revenue late on Thursday – and, er, come up with a clever headline while you’re at it.” 😏

What does this mean?

Just as a number of analysts had predicted, Amazon’s ecommerce business benefited as physical stores closed and shoppers went into lockdown. That helped lift its retail revenue by more than investors had forecast. And with more people working from home, Amazon’s super-profitable cloud computing services saw increased demand too, boosting that segment’s revenue by 33% ☁️ Of course, it was also hit with higher costs as it quickly ramped up its logistics to meet demand and maintain safe working conditions – and that, ultimately, led the company to report a lower-than-expected profit.

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Amazon’s revenue forecast for this quarter was as expected, but its $4 billion of additional coronavirus expenses mean it doesn’t necessarily expect to make much of a profit at all. And while that’s not something investors had banked on, at least they received some guidance: several other large companies haven’t given any 🤷‍♀️

Why should I care?

Finimizers tend to watch tech stocks like Amazon closely, but at around $2,500 apiece – a record high on Thursday – actually buying one of its shares is a big commitment, and could turn a balanced investment portfolio into a risky one. Happily, some brokers now offer fractions of shares instead, giving you a way to buy into Amazon with far less cash than you’d normally need.

💻 Not all ecommerce is created equal: while the pandemic’s been kind to Amazon and Target’s online retail businesses, competitors everywhere from fashionista Zalando through to high-end player Farfetch have struggled. Still, at least they have an ecommerce business: Primark doesn’t, sending the fashion chain’s sales to zero.

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