Amazon: Online retailer benefits enormously from the pandemic

Amazon

The online retailer Amazon continues to benefit enormously financially from the ongoing global pandemic - this is evident from the company's latest quarterly figures. Not surprising, since many local shops around the world have long been closed and online orders are not only often the only alternative, but also convenient at the same time. As a result, Amazon's sales and profits continue to skyrocket, and founder Jeff Bezos - the richest person in the world - is getting richer and richer.

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Over 100 billion sales in the quarter

In the first quarter of 2021, i.e. from January through March of the current year, Amazon generated sales of over 100 billion US dollars. The profit during this period was 8.1 billion US dollars, which is about 6.7 billion euros. For comparison: In the quarter exactly a year ago, i.e. January to March 2020, the profit was 2.5 billion US dollars. This is also an enormous sum, but roughly tripled in a year-on-year comparison

Pandemic heats up sales

The company's success is fueled by the global pandemic, and in the home country of the USA also by the free checks that the government issued to many Americans. Amazon's cloud services (Amazon Web Services) are also growing rapidly, with sales already reaching around 13.5 billion US dollars in the first quarter of 2021. Many companies use the services of Amazon for cloud and other online services, one of the world market leaders also in this business area.

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Jeff Bezos even richer

Amazon founder Jeff Bezos, who has long been the richest person in the world, is getting richer thanks to the strong growth of the online retailer. Bezos owns a large stake in Amazon stocks; their value rose significantly after the quarterly figures were announced. According to Bloomberg, Bezos currently has assets of nearly $ 200 billion.

Sources: Tagesschau / Engadget

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Amazon stock climbs 2% after delivering a huge earnings beat with Q1 revenue up 44% to $108 billion

© Mark Ralston/AFP/Getty Images Outgoing Amazon CEO, Jeff Bezos. Mark Ralston/AFP/Getty Images

Amazon's shares rose 2% in regular trading on Friday after reporting first-quarter results that beat analyst expectations in its fourth record quarter in a row.

CONSTELLATION BRANDS, INC.

Quarterly revenue rose 44% to $108.52 billion, boosted by strong growth in e-commerce and AWS (Amazon Web Services) cloud-services.

Profits meanwhile tripled to $8.1 billion, far above the previous quarter's $2.5 billion. Amazon delivered remarkable results even compared to the lofty expectations analysts held for the stock, DailyFX strategist Peter Hanks said.

Investors were wondering if Amazon's growth would slow as economies re-open and shops return to business as usual, said Martin Garner, chief operating officer at analyst firm CCS Insight. But there was no sign of that, despite the lack of a Prime Day in the quarter to boost sales, he said.

Beating analyst estimates on both profits and sales and attracting 200 million Prime subscribers in April was a staggering feat for the company that is one of the biggest winners of the pandemic.

'Amazon Prime Video is now 10 years old and saw 175 million users during the last year, starting to get close to the numbers Netflix has achieved,' Garner said. 'Prime video is a key benefit for Prime members, and Amazon is continuing to invest heavily in original content as well as in sports rights to expand the catalogue.'

The AWS cloud platform is 15 years old is now a $54 billion per year business, growing consistently at over 30% per year.

'After a slight slowdown in the pace of growth during the pandemic, in which troubled businesses offset increased adoption of cloud services, stronger growth has resumed,' Garner said. 'This is driven by an increased pace of digitalization across most sectors and by some badly hit sectors starting to build their business back up.'

Adam Vettese, analyst at multi-asset investment platform eToro, said Amazon's shares are poised to break to a new all-time high at Friday's US market open, according to current indications.

'The move certainly looks justified given the company's results overnight, and it appears to be a question of when, and not if, it becomes a $2 trillion company,' he said. 'Even as founder and CEO, Jeff Bezos prepares to hand over the reins to Andy Jassy, the guidance from Amazon remained solid, with its core business - as well as its giant cloud service arm AWS - all projected to continue to grow. With the grocery market its next big target, the sky is still the limit for this business.'

Amazon's shares closed at $3,471.31 on Thursday, but were trading around $3,534.64 per share ahead at Friday's market open.