SEATTLE – Amazon is now back on a growth curve due to the pandemic leading to increased online shopping, after seeing its net income decrease in the first quarter with the initial expenses of COVID-19.
The company’s net income for the second quarter, which ended on June 30, increased to $5.2 billion, or $10.30 per diluted share, compared with net income of $2.6 billion, or $5.22 per diluted share, in the second quarter of 2019. Basic earnings per share rose to $10.50 from $5.32 in the second quarter of 2019.
Operating income increased to $5.8 billion in the second quarter, compared with operating income of $3.1 billion in the 2019 quarter. Operating cash flow increased 42% to $51.2 billion for the previous 12 months, compared with $36 billion for the year-ago period.
“As expected, we spent more than $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand,” said Jeff Bezos, Amazon founder and CEO. “We purchased personal protective equipment, increased cleaning of our facilities, followed new safety process paths, added new backup family care benefits and paid a special thank-you bonus of more than $500 million to front-line employees and delivery partners.”
Bezos said the company has created more than 175,000 new jobs since March and is in the process of bringing 125,000 of these employees into regular, full-time positions. He added that sales from third-party sellers again grew faster this quarter than Amazon’s first-party sales.
For the third quarter 2020, the company said it could report net sales of between $87 billion and $93 billion. The company also forecasts growing between 24% and 33% compared with the third quarter of 2019. This guidance assumes more than $2 billion of costs related to COVID-19.
“Our first priority is to keep employees safe,” said Dave Olsavsky, Amazon CFO, on the quarterly earnings call. “After that, we are working to get our capacity increased and get faster shipments in order to see the one-and-two-day shipping recover through the quarter but it’s still behind where it should be. We will continue to work on that.”
Olsavsky said that during the second quarter, third-party sellers stepped up to add selection for customers and have seen significant growth with third-party sellers now representing more overall unit volume.
The company also announced that its annual Prime Day would likely take place in the fourth quarter this year, in October, in the U.S. and all other regions except India, which will celebrate its annual Prime Days on Aug. 6-7.