Amazon shares dropped in extended trading Thursday after reporting that it would be spending an eye-watering $4 billion on coronavirus-related expenses.
In its first earnings report since the coronavirus crisis hit — sending demand for its services to skyrocket — Amazon said revenue soared to $75.5 billion, up 26 percent from a year earlier and beating Wall Street expectations for revenue of $73.74 billion.
However, net income of $2.5 billion, or $5.01 per share, fell 30 percent over the year ago quarter. And the biggest blow was the $4 billion operating expense, which had CEO Jeff Bezos writing in a note to investors that they “may want to take a seat” to digest the figure.
“These aren’t normal circumstances,” Bezos said. “We expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe. This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities.”
The e-commerce juggernaut, which has seen its stock climb more than 30 percent since the coronavirus first reached the US in January, was down more than 5 percent after delivering its earnings report.
