Connect with us

Internet

Amazon Posts Biggest Profit Ever at Height of Pandemic

Avatar

Published

on

By Reuters | Updated: 31 July 2020

Amazon on Thursday posted the biggest profit in its 26-year history as online sales and its lucrative business supporting third-party merchants surged during the coronavirus pandemic.

Shares of Amazon, the world’s largest online retailer, rose 5 percent in after-hours trade.

While rival brick-and-mortar retailers have had to shut stores during government-imposed lockdowns, Amazon hired 175,000 people in recent months and saw demand for its services soar. The company said revenue jumped 40 percent from a year earlier to $88.9 billion (roughly Rs. 6.64 lakh crores).

Amazon had forecast it might lose money in the just-ended second quarter because it expected to spend some $4 billion (roughly Rs. 29,877 crores) on protective equipment for staff and other expenses related to COVID-19. It did just that – and still earned $5.2 billion (roughly Rs. 38,847 crores) – double its net income from a year prior.

Jeff Bezos, who founded the company in July 1994 and is the world’s richest person, said in a statement, “This was another highly unusual quarter.”

Amazon’s shares have risen by more than 60 percent this year, adding to the wealth of Bezos, its biggest stockholder. The S&P 500 is virtually flat.

Jesse Cohen, senior analyst at Investing.com, said Amazon’s business model sets it up “to expand its e-commerce dominance even more broadly as the global COVID-19 pandemic continues to flare.”

Online store sales jumped 48 percent to $45.9 billion (roughly Rs. 3.42 lakh crores) in the second quarter. Meanwhile, merchants paid Amazon more to fulfill and sponsor their products in order to reach the company’s loyal customers. That resulted in a 52 percent and 41 percent jump in seller services revenue and other revenue such as from ads, respectively.

Amazon’s cloud services also saw higher demand as companies switched to virtual offices in the pandemic. Revenue from Amazon Web Services (AWS), which sells data storage and computing power in the cloud, rose nearly 29 percent to $10.81 billion (roughly Rs. 80,758 crores).

Still, that fell just short of analysts’ estimates of $10.95 billion (roughly Rs. 81,804 crores), according to IBES data from Refinitiv. The cloud business of rival Alphabet’s Google meanwhile was up over 43 percent year over year.

Technology analyst Patrick Moorhead said, “AWS continued to grow, albeit at a slower rate than last quarter.”

‘Everyone was buying groceries’

Brian Olsavsky, Amazon’s chief financial officer, told reporters that the outsised profit surprised the company because at the time it issued its forecast last quarter, shoppers were buying lower-margin products.

“Everyone was looking for masks; everyone was looking for gloves; everyone was buying groceries online. That mix is not super profitable,” he said. “What we saw in Q2 was not only did the mix start to shift back to a more normal mix” but that “we also were able to ship a lot more than we had originally thought.”

Online grocery sales tripled year over year, and worldwide streaming video hours doubled, Olsavsky said on a call with analysts. Delivery and video services bundled with the company’s loyalty club Prime are a key reason why customers subscribe to that program and do more of their shopping on Amazon.

Amazon also posted a rare operating profit in its international business, which Olsavsky attributed to a step up in customer spending in Europe and Japan during the pandemic.

The company forecast net sales of $87 billion (roughly Rs. 6.5 lakh crores) to $93 billion (roughly Rs. 6.94 lakh crores) for the third quarter, ahead of analysts’ expectations of $86.34 billion (roughly Rs. 6.45 lakh crores), according to IBES data.

Olsavsky said that Prime Day, the company’s lucrative summer marketing blitz, would be pushed back to the fourth quarter, excluding its business in India. He also said that per usual the current quarter would see higher costs as the company gears up for the holiday season, even more pronounced now due to higher-than-usual sales.

It would spend more than $2 billion (roughly Rs. 14,943 crores) in COVID-related expenses during the third quarter as well, he said on the analyst call.

Still, Amazon anticipates operating profit between $2 billion (roughly Rs. 14,943 crores) and $5 billion (roughly Rs. 37,360 crores) for the quarter, the midpoint of which is higher than analysts were expecting, according to research firm FactSet.


© Thomson Reuters 2020

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Internet

Bitcoin Slumps 10 Percent as Pullback From Record High Gathers Pace

Avatar

Published

on

By Reuters | Updated: 21 January 2021

Bitcoin slumped 10 percent on Thursday to a 10-day low, retreating further from record highs, with traders citing fears of tighter US regulation.

The world’s most popular cryptocurrency Bitcoin was last down 7.5 percent at $32,779 (roughly Rs. 23.9 lakhs) after falling as low as $31,977 (roughly Rs. 23.3 lakhs). It has lost nearly a quarter since touching a record $42,000 (roughly Rs. 30.6 lakhs) on January 8.

The pullback comes amid growing concerns that Bitcoin is one of a number of financial market price bubbles.

Fears that US President Joe Biden’s administration could attempt to regulate cryptocurrencies have also weighed on sentiment, traders said.

During a Senate hearing on Tuesday Janet Yellen, Biden’s pick to head the US Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities.

“I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels,” said the former chair of the US Federal Reserve.

Joseph Edwards of cryptocurrency broker Enigma Securities said these comments had a substantial impact.

“The action over the last 36 hours or so has largely been rippling outwards from the Janet Yellen comments on crypto,” he said, adding that it was still unclear exactly what, if any, moves the Biden administration would take.

“We do think it’s probably still just a lapse in momentum rather than a sea change, though.”

© Thomson Reuters 2021

Continue Reading

Internet

Google Signs Deal on Copyright Payments to French Press

Avatar

Published

on

By Agence France-Presse | Updated: 21 January 2021

Google and French newspapers said Thursday they had signed an agreement aimed at opening the path to digital copyright payments from the online giant after months of heated negotiations.

The accord signed with the APIG alliance of French dailies involves “neighbouring rights,” which call for payment for showing news content with Internet searches, a joint statement said.

It said the agreement sets a framework for Google to negotiate individual licence agreements with newspapers on the payments and will give papers access to its new News Showcase programme, which sees it pay publishers for a selection of enriched content.

Payments are to be calculated individually and will be based on criteria including Internet viewing figures and the amount of information published.

APIG head Pierre Louette said the deal amounts to the “effective recognition of neighbouring rights for the press and the start of their remuneration by digital platforms for the use of their publications online.”

Google France chief Sebastien Missoffe called the deal proof of a “commitment” that opens up “new perspectives.”

News outlets struggling with dwindling print subscriptions have long seethed at Google’s failure to give them a cut of the millions it makes from ads displayed alongside news search results.

The COVID-19 crisis has hurt sales even further.

A Paris appeals court ruled in October that the US giant had to continue to negotiate with French news publishers over a new European law on neighbouring rights.

France was the first country in the EU to enact the law but Google had initially refused to comply, saying media groups already benefit by receiving millions of visits to their websites.

Continue Reading

Internet

US President Joe Biden Calls for Coders in Hidden Message on White House Website

Avatar

Published

on

By Reuters | Updated: 21 January 2021

The recently updated website for US President Joe Biden’s White House carried an invitation for tech specialists savvy enough to find it.

Hidden in the HTML code on the White House website was an invitation to join the US Digital Service, a technology unit within the White House.

“If you’re reading this, we need your help building back better,” the message said.

Former President Barack Obama launched the service in 2014 to recruit technologists to help revamp government services – for example by modernising Medicare’s payment system or reforming hiring practices across government agencies.

Tech specialists join the Digital Service for typically one or two years.

Joe Biden was sworn in as president of the United States on Wednesday, offering a message of unity and restoration to a deeply divided country reeling from a battered economy and a raging coronavirus pandemic that has killed more than 4,00,000 Americans.

Standing on the steps of the US Capitol two weeks after a mob of then-President Donald Trump’s supporters stormed the building, Biden called for a return to civic decency in an inaugural address marking the end of Trump’s tempestuous four-year term.

“To overcome these challenges, to restore the sou,l and secure the future of America, requires so much more than words. It requires the most elusive of all things in a democracy: unity,” Biden, a Democrat, said after taking the oath of office.

“We must end this uncivil war that pits red against blue, rural versus urban, conservative versus liberal. We can do this – if we open our souls instead of hardening our hearts.”

The themes of Biden’s 21-minute speech mirrored those he had put at the centre of his presidential campaign, when he portrayed himself as an empathetic alternative to the divisive Trump, a Republican.

Saying there was “no time to waste,” Biden signed 15 executive actions shortly after entering the White House on Wednesday afternoon to set a new course and overturn some of Trump’s most controversial policies.

The orders included mandating masks on federal property, halting the withdrawal from the World Health Organization, rejoining the Paris climate accord and ending a travel ban on some Muslim-majority countries.

Biden told reporters in the Oval Office that Trump had left him “a very generous letter,” but he would not disclose its contents.

© Thomson Reuters 2021

Continue Reading

Internet

Google Asks US Judge to Move States’ Antitrust Lawsuit to California

Avatar

Published

on

By Reuters | Updated: 21 January 2021

Alphabet’s Google has asked a US judge in Texas to transfer an antitrust lawsuit filed by 10 states in December to a court in California, a state that has more relevant witnesses and documents needed by the company, it said.

In December, Texas and nine other states sued Google in a US court in Sherman, Texas, accusing the search engine company of working with Facebook in a way that violated antitrust law to boost its already-dominant online advertising business.

Google said in a court filing that the first case alleging it monopolised online display advertising was filed in May by an advertiser, and that since then five other cases have been filed.

All were filed in the Northern District of California, “the venue where Google is headquartered and where more relevant witnesses and documents are located than in any other district in the country,” Google said in its request to move the case, which was filed late on Tuesday.

Google adds that the states’ lawsuit “does not identify a single company or person who might be a witness at trial and lives or works within 100 miles” of the Texas courthouse where the case was filed.

The states asked that Google, which controls a third of the global online advertising industry, compensate them for damages and sought “structural relief,” which is usually interpreted as forcing a company to divest some of its assets.

“As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat,” the lawsuit said.

Google previously called the Texas lawsuit “meritless.”

In total, Google has been sued three times since October by US states and the Justice Department, including the Texas lawsuit.

In December, a separate group of 38 US states and territories filed their own antitrust complaint Google.

© Thomson Reuters 2021

Continue Reading

Internet

Amazon Offers to Help US With COVID-19 Vaccine Efforts in Letter to President Joe Biden

Avatar

Published

on

By Reuters | Updated: 21 January 2021

Amazon on Wednesday offered to help with the United States’ efforts involving the COVID-19 vaccine, according to a letter addressed to President Joe Biden, seen by Reuters.

The world’s largest online retailer has an agreement with a healthcare provider to administer vaccines at its facilities and will move forward once doses are available, Dave Clark, chief executive of Amazon’s worldwide consumer business, said in the letter.

Beyond offering the vaccine to Amazon employees, Clark added, “We are prepared to leverage our operations, information technology, and communications capabilities and expertise to assist your administration’s vaccination efforts.”

The offer comes as Biden became the 46th US president on Wednesday. The president has laid out a goal of delivering 100 million COVID-19 vaccine doses within his first 100 days in office, an endeavour Amazon aims to support. Clark congratulated Biden and Vice President Kamala Harris on their inauguration.

The company employs more than 8,00,000 people in the United States, making it the second-biggest private employer behind Walmart. More than 19,000 US workers at Amazon had contracted the virus as of September, underscoring the vaccine’s importance to keeping its staff safe and warehouses operational.

Amazon said in the letter that its scale would let it make an impact in countering the virus, but it did not provide details on the form its help could take. The company did not immediately answer a request for comment on its vaccine rollout if any so far.

© Thomson Reuters 2021

Continue Reading

Internet

Google Investigates Another Ethical AI Team Member Over Handling of Sensitive Data Following Timbit Gebru Exit

Avatar

Published

on

By Reuters | Updated: 20 January 2021

Alphabet’s Google is investigating a member of its ethical AI team and has locked the corporate account linked to that person after finding that thousands of files were retrieved from its server and shared with external accounts, the company said on Wednesday.

Axios, which first reported the latest investigation around a member of Google’s AI team, said Margaret Mitchell had been using automated scripts to look through her messages to find examples showing discriminatory treatment of Timnit Gebru, a former employee in the AI team who was fired.

Gebru, who is Black, was a top AI ethics researcher at Google and was fired in December. While Gebru claimed she was sacked for criticising the diversity efforts within Google’s AI unit, the company has disputed it.

“Our security systems automatically lock an employee’s corporate account when they detect that the account is at risk of compromise due to credential problems or when an automated rule involving the handling of sensitive data has been triggered,” a Google representative said in a statement.

“We are actively investigating this matter as part of standard procedures to gather additional details.”

Mitchell did not immediately respond to a request for comment via her LinkedIn account.

Google’s diversity efforts have been questioned by employees and adds to years of angst, including several resignations and firings in the AI department, raising doubts whether the company’s efforts to minimise the potential harms of its services are sufficient.

© Thomson Reuters 2021

Continue Reading

Trending