The company yesterday released first-quarter results that trounced analysts’ expectations.
Amazon shares climbed more than 3% in extended trading Thursday after the company released its first-quarter earnings, beating Wall Street’s expectations for earnings and revenue.
The company reported sales of $108.5 billion, up 44 percent from a year prior, and a staggering $8.1 billion profit. Amazon's e-commerce businesses around the world continued to get a boost from the COVID-19 pandemic. Many consumers are still avoiding brick-and-mortar stores as much as possible.
The blowout quarter comes as CEO, chairman and founder Jeff Bezos prepares to leave the company sometime in the second half of the year. Andy Jassy, head of Amazon’s cloud computing unit, will take the reins of the company once Bezos departs. On a call with investors Thursday evening, CFO Brian Olsavsky declined to comment on the company’s transition plans.
Crucially, Amazon confirmed in its guidance that this year’s Prime Day will take place in June, which will likely help year-over-year comparisons for revenue in the second quarter. Typically, Amazon’s annual, two-day discount bonanza takes place in July, but the company postponed the event to October last year amid pandemic-related uncertainty.
When asked about the Prime Day timing, CFO Brian Olsavsky said on a call with investors:
“In many areas, July is vacation month, so it might be better for customers, sellers and vendors to experiment with a different time period. We believe that it might be better timing later in [the second quarter], so that’s what we’re testing this year.”
For Q2, Amazon guided for net sales in the range of $110 billion to $116 billion, which would equate to year-over-year growth of 24% to 30%. This outlook assumes Prime Day will occur in the second quarter, rather than in its traditional spot in the third quarter. (Last year, it was held in the fourth quarter due to the pandemic.) The company's entire guidance range exceeds Wall Street's consensus estimate of $108.7 billion.
Amazon (which doesn't provide earnings guidance) also expects that its operating income will be between $4.5 billion and $8 billion, compared with $5.8 billion in the year-ago period. That range means management thinks operating income could decline by as much as 22% or rise by as much as 38%. This outlook includes about $1.5 billion in costs related to COVID-19.