Amazon announced in its fourth quarter 2020 earnings report that AWS CEO Andy Jassy will replace Jeff Bezos as CEO in the third quarter of this year. Bezos will move to the role of CEO.
At $ 125.56 billion, the company posted the highest-revenue quarter of all time, surpassing the symbolic mark of $ 100 billion for the first time.
Amazon’s shares rose 1% in expanded trading.
Here are the results:
- Merits: Refinitiv forecast $ 14.09 versus $ 7.23 per share
- Revenue: $ 125.56 billion versus $ 119.7 billion predicted by Refinitiv
Bezos announced his decision to step down in earnings release and a memo to employees, noting that in his new role he will focus on “new products and early initiatives” including the Day One Fund, the Bezos Earth Fund who have favourited Washington Post and its private space company Blue Origin.
“If you get it right, a few years after a surprising invention, the new has become normal. People yawn. That yawn is the greatest compliment an inventor can receive,” wrote Bezos. “If you look at our financial results, you are actually seeing the long-term cumulative results of the invention. Right now, I see Amazon as the most ingenious of all of them, making it an optimal time for this transition.”
After several months of heavy investments, Amazon expects coronavirus costs to slow to around $ 2 billion in the first quarter of fiscal 2021, after around $ 4 billion in the third quarter of this year and more than $ 2 billion Dollars in the second quarter.
Speaking to reporters, Brian Olsavsky, Amazon’s CFO, attributed the drop in Covid costs to a volume shift. “We expect the volume to decrease by about 25% from Q4 to Q1,” he added.
The company also saw higher costs in the fourth quarter after paying a $ 300 one-time bonus to frontline workers last November.
The company forecast Q1 operating income of $ 3 billion to $ 6.5 billion, assuming Covid-19-related costs of around $ 2 billion.
According to Amazon, first quarter sales will be between $ 100 billion and $ 106 billion, a slowdown from Q4 2020 but an increase of between 33% and 40% year over year. Analysts were expecting sales of 95.8 billion US dollars.
Amazon’s blockbuster results for the fourth quarter were due in part to what was known as a “record breaking holiday season,” which saw more than a billion products shipped to customers worldwide. Persistently accelerating e-commerce demand and a pandemic-delayed Prime Day also contributed to Amazon’s record sales for the quarter.
Once again, the cost of shipping these goods to consumers rose. Spending increased 67% year over year to $ 21.5 billion.
Outside of its core retail business, revenue from Amazon’s cloud computing unit grew 28% to $ 12.7 billion from $ 9.95 billion last year. This did not meet Wall Street’s expectations of $ 12.83 billion.
Sales at Amazon’s physical store unit, which includes Whole Foods Market, declined 8% as the pandemic led shoppers to experiment with new shopping methods, including ordering groceries online.
This story evolves. Check for updates again.