Amazon reports largest quarter ever amid Bezos transition

Amazon capped off 2020 by delivering its largest quarterly revenue to date — news that was somewhat overshadowed by the announcement that founder Jeff Bezos will step down as CEO during the third quarter.  

The online giant’s net sales jumped 44% to $125.5 billion in the quarter ended Dec. 31, passing the $100 billion milestone for the first time and surpassing analysts’ estimate of $119.7 billion. Amazon’s sales were fueled by the ongoing pandemic-related surge in online shopping, especially during the holiday season, which the company described as “record-breaking” and during which it delivered more than a billion products to shoppers worldwide. Amazon’s revenue also got a boost from the shift of its Prime Day mega-shopping event from July to October.

Amazon’s net income more than doubled to $7.2 billion, or 14.09 per share, soaring past analysts’ average estimates of $7.34 per. The company spent $4 billion on COVID-19 measures in the quarter. 

Outside of its core retail business, Amazon Web Services, the company’s lucrative cloud-computing business, saw its revenue rise 28% to $12.7 billion, missing expectations of $12.83 billion. It represented 10% of Amazon’s total sales, but continues to drive much of the company’s profit.

Amazon said it hired 175,000 new full- and part-time employees in the fourth quarter, more than triple the 50,000 employees it hired in the year-ago period. The company ended its fiscal year with nearly 1.3 million employees across the globe, up 63% over last year.

For the full year, Amazon’s revenue rose to $386.1 billion from $280.5 billion. Net income increased to $21.3 billion, or $41.83 per diluted share, compared with net income of $11.6 billion, or $23.01 per diluted share, in 2019.

The company spent $11.5 billion on hiring, expansion and other costs related to COVID-19 last year.

Amazon expects another billion dollar quarter going forward. For the current quarter, it anticipates sales between $100 billion and $106 billion, up 33% to 40% compared with the year-ago period. It forecasts profit between $3 billion and $6.5 billion.

Amazon, which has experienced heavy coronavirus-related costs during the pandemic, said it expects such costs to decelerate in the early months of this year, CFO Brian Olsavsky told analysts on the company’s earnings call. The company expects to spend about $2 billion on COVID-related costs in the first quarter, which would be about half of what it spent in the fourth quarter.