Amazon.com Inc. (NASDAQ: AMZN) is expected to spend $4 billion or more in response to the coronavirus pandemic, potentially wiping out profits generated in the second quarter of this year.
According to a report by MarketWatch, Amazon, which topped $75 billion in sales through Q1 amidst the coronavirus pandemic, has witnessed a decline in profit. The company told investors it may lose money during the current period in an effort to keep up with the rise in demand.
Share prices for AMZN slipped more than 5% in after-hours trading on Thursday in response to the news. Year-to-date the stock is, however, up sgnificantly.
Source: Google
While Amazon reported first-quarter earnings of $2.5 billion, down from $3.56 billion the year before, total revenue grew from $59.7 billion to $75.5 billion. Analysts were predicting the company would generate more than $4 billion in profit during Q2 2020.
However, Amazon CEO Jeff Bezos said the company expected to spend at least $4 billion on operating costs alone in response to the coronavirus pandemic.
The MarketWatch report highlighted the company’s procurement of 100 million face masks to be worn by all “associates, drivers and support staff.” Amazon has also purchased more than 1,000 thermal cameras and 31,000 thermometers to be used for mandatory employee temperature checks at its Whole Foods Market stores.
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