Amazon CEO Tells Investors “You Might Want To Sit Down” As He Explains Why The Company Will Spend “All” $ 4 Billion In Profits

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Not surprisingly, Amazon.com Inc. exceeded quarterly sales expectations in the midst of the COVID-19 pandemic, but it was comments by CEO Jeff Bezos, in a written statement accompanying the retailer’s earnings report, that really drew attention to Wall Street Thursday night.


“If you are an Amazon shareholder, you may want to sit down, because we don’t think small. “


– Jeff Bezos

The remarks are arguably the longest-running statement by the world’s wealthiest man in a quarterly report, and underscore the magnitude of the deadly disease that has left much of the world struggling to escape forced corporate closings and a temporary cessation of normality to help limit contagion. propagated.

In this environment, Amazon
AMZN,
-4.70%

flourished, serving as a must-have online delivery service, which had previously managed to crush competitors through the power of a 1.2 trillion dollar giant. Some rivals, in fact, have collapsed under the pressure of the current environment even as Amazon’s shares have climbed 34% so far in 2020.
Lily:Amazon to spend $ 4 billion or more on coronavirus response, potentially wiping out second-quarter profits

However, Bezos has avoided the extent to which the cloud and consumer services company has firmly distanced itself from its competitors, including long-time retailers like Macy’s.
M,
-2.56%

and J.C. Penney Co. Inc.
JCP,
-2.67%,
which end up on the ropes.
Check-out:Apple, Amazon and Gilead take over the race for gains with a big lead
Instead, the boss of Amazon focused on the road ahead.
Bezos’ statement highlights the costs that businesses that survive this public health crisis will face in the weeks, months and years to come as they take steps to keep workers and customers safe.
“We are inspired by all the essential workers we see doing their jobs – nurses and doctors, grocery store tellers, police and our own extraordinary front-line employees,” he wrote.
“The service we provide has never been more critical, and the people who work on the front lines – our employees and all contractors throughout our supply chain – rely on us to keep them safe during their work, ”wrote Bezos. “We are not going to let them down. “
Amazon reported $ 75 billion in first-quarter sales, but earnings declined.
Amazon’s planned spending for the future could also hurt the company in the coming quarters. Amazon shares fell 5.5% in after-hours trading after advancing during Thursday’s regular trading session.
The company’s shares have climbed 34% so far this year, a remarkable achievement for the first three months of the year, but which comes with the Dow Jones Industrial Average
DJIA,
-1.43%,
the S&P 500 index
SPX,
-1.63%

down 15% and 10%, respectively, in 2020. The Nasdaq composite index
COMP,
-1.75%

is down just 0.9%.
With Wall Street divided into the haves and have-nots in the midst of the coronavirus pandemic, Amazon has only strengthened its position among the top.
Bezos’ fortune, meanwhile, has jumped more than $ 24 billion since the pandemic conquered the wider roller coaster market, according to Fortune. This increase brought his net worth to $ 148.6 billion, according to Forbes, making him by far the richest person in the world, even after having transferred a large part of his fortune to his partner during a procedure. divorce in July.
Check out Bezos’ full statement below:

From online shopping to AWS to Prime Video and Fire TV, the current crisis demonstrates the adaptability and sustainability of Amazon’s business like never before, but it is also the most difficult period we have ever known. ” said Jeff Bezos, founder and CEO of Amazon. “We are inspired by all the essential workers we see doing their jobs – nurses and doctors, grocery store tellers, police and our own extraordinary front-line employees. The service we provide has never been more critical, and the people who do the front line work – our employees and all subcontractors throughout our supply chain – depend on us to keep them safe for their work. We are not going to let them down. Providing customers and protecting employees as this crisis continues for months on end will require skill, humility, invention and money. If you are an Amazon shareholder, you may want to sit down, because we don’t think small. Under normal circumstances, in the coming second quarter, we expect to make some $ 4 billion or more in operating profit. But these are not normal circumstances. Instead, we expect to spend all of that $ 4 billion, and maybe a little more, on COVID-related expenses to get products to customers and keep employees safe. This includes investments in personal protective equipment, improved cleaning of our facilities, less efficient processes that better allow effective social distancing, higher wages for hourly teams and hundreds of millions to develop our own testing capabilities. COVID-19. There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I am confident that our long-term oriented shareholders will understand and adopt our approach, and in fact would expect no less.

Continue reading:Amazon shares are down, first quarter profits are lower than expected

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