Amazon Says It Risks Loss on Spending Rise for Pandemic
Comment of the Day

May 01 2020

Commentary by Eoin Treacy

Amazon Says It Risks Loss on Spending Rise for Pandemic

This article by Matt Day and Spencer Soper for Bloomberg may be of interest to subscribers. Here is a section:

“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,” Bezos said Thursday in a statement reporting Amazon’s results. “But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe.”

“Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money,” he said. “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.”

Eoin Treacy's view

The vast majority of companies have refused to give guidance on the 2nd quarter’s earnings, probably because they don’t wish to alarm investors when they hope the third quarter will be a lot better. However, Jeff Bezos and Elon Musk have taken a different approach.

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