
Amazon.com Announces First Quarter Results - jedberg
https://ir.aboutamazon.com/news-release/news-release-details/2020/Amazoncom-Announces-First-Quarter/
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txcwpalpha
> If you’re a shareowner in Amazon, you may want to take a seat, because we’re
> not thinking small. Under normal circumstances, in this coming Q2, we’d
> expect to make some $4 billion or more in operating profit. 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. This includes investments in
> personal protective equipment, enhanced cleaning of our facilities, less
> efficient process paths that better allow for effective social distancing,
> higher wages for hourly teams, and hundreds of millions to develop our own
> COVID-19 testing capabilities

This seems huge. Spending _all_ $4 billion of their expected Q2 profit on
covid-19-related things, including developing their own tests.

Committing to spending all of your future profit (which seems like a huge
statement on its own) aside, anyone know how this compares to what other
companies (or even governments) are spending on safety/testing? Trying to get
a sense for the scale here.

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lucasmullens
They included "getting products to customers" in what they'll spend the 4
billion on, seems like they can include basically any cost in that.

~~~
look_lookatme
Considering I have been getting non-Amazon purchases much faster than Amazon
purchases I suspect that's really code for paying for the delivery costs that
exceeded the actuarial models that were baked into Amazon Prime and thus
turned 1 day free delivery into 8 day free delivery.

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vadym909
This may be cynical, but I think this was a PR focused earning to offer better
optics.

I think they absolutely had to say something to placate the rising tide of
voices against their monopoly and for their contribution to so many retailers'
downfall- even without COVID. This will earn them some brownie points as in
"Oh- AMZN's sales went up but at least they were not gouging- they invested
all their profit in improving their service and employee benefits"

~~~
pb7
This type of cynicism is exhausting. It seems that if they're damned if they
do and damned if they don't, Amazon might as well pocket the cash and not
worry about doing good things because people will trash them regardless.

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jjj1232
I’m not the original commenter so I’m only speaking for myself here but if a
company has shown itself to be ruthless and harmful (to its employees, the
environment, small businesses) I don’t think you need to give them the benefit
of the doubt when they do a solitary good thing.

I’ll give Amazon props when they start supporting warehouse unionization,
lobby the govt for a carbon tax, sell off Whole Foods, AWS, amazon basics +
all in-house home goods into separate entities. Of course that will never
happen because anything that actually stops the harm that Amazon does would be
detrimental to the business.

~~~
enitihas
So you don't support any big company? Which company is supporting
unionisation? Hell, most big tech companies don't even employ non professional
workers directly, instead as a contractor.

So which is the noble big company you support? Which has sold of all
diversified businesses? A company doing what you are suggesting will not even
survive for long.

~~~
jjj1232
No, I can’t think of any big company I support.

Amazon, Google, Apple, Exxon, etc. are all built on exploitation.

My point wasn’t that Amazon is more evil than other corporations, I think
that’s only marginally true. Probably only because of how much more efficient
they are than a lot of companies.

~~~
alexpetralia
While I agree with you, I think your criticism is better directed toward
capitalism, not the winners within it. This is a structural problem.

~~~
enitihas
The problem remains in any other system though. In Communism, the winners
would be the politburo members instead of bigco executives.

~~~
miscPerson
In fact, that’s the argument for capitalism:

All of these systems suck, so let’s favor people who can lead voluntary large
tribes over the politically connected, such as the politburo.

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slivanes
Isn't the elephant in the Amazon boardroom that AWS essentially pays for any
mischief they can do with their retail arm?

i.e. Sell an equivalent item at a loss for an extended period of time to force
a competitor / retailer out of business? Opening up a physical bookstore after
essentially crushing that market felt like a "finger" to ex-businesses to me.

~~~
jrockway
I don't see the problem. It's Amazon's money; they are entitled to spend it
however they want.

I think a lot of people are mad at Amazon for various things; undercutting
mom-and-pop businesses in niche markets, paying people to deliver packages
almost for free, busting warehouse unions, counterfeit items, etc. The
solution is to not fund Amazon. Move your servers elsewhere. Shop at Target.
Ask your representatives to make stronger labor laws.

But all in all, I don't think it's intrinsically wrong to start selling an
internal tool and then end up making a lot of money from it. If Amazon weren't
dominating online retail, someone else would be. Nobody wants to go to a
store. It's boring and there isn't a very good selection. That is not the
fault of cloud computing.

~~~
ac29
> I don't see the problem. It's Amazon's money; they are entitled to spend it
> however they want.

If they actually were selling products at a loss to put competitors out of
business, that would be considered predatory pricing. Imagine Apple using
their iPhone profits to sell MacBooks for $200 - it would distort the market
and eliminate competition. It might be good for consumers in the short run,
but much worse when they were the only game left in town.

~~~
gundmc
They basically did this with diapers.com a decade ago.

[https://slate.com/technology/2013/10/amazon-book-how-jeff-
be...](https://slate.com/technology/2013/10/amazon-book-how-jeff-bezos-went-
thermonuclear-on-diapers-com.html)

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jedberg
As I predicted (as did many others), their revenue was way up, but their
earnings per share missed significantly due to increased costs from COVID-19.

~~~
united893
Just curious why does wall st and others use "Earnings per share". The number
of shares is arbitrary and can be adjusted up or down by a split/reverse split
or dilution.

It seems to me that EPS is just earnings divided by an arbitrary number. Why
not look at operating profit as a percentage instead?

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scoopdewoop
dividends are what people historically bought stocks for, not speculation. If
you want your stocks to pay dividends, earnings per share is a much more
useful metric.

~~~
lonelappde
I bought $10K of STOCK. I hope for 5% dividend. I have no idea how many shares
that is, and I don't care.

~~~
yazaddaruvala
Then you want Earnings per Price. i.e. How much Earnings for
STOCK*STOCK_PRICE.

(Earning / Price) is not a typical metric, (Price / Earnings) (i.e. PE Ratio)
is the more typical metric. These metrics are meant for casual/institutional
investors not lay people[1].

Meanwhile, if you still want (Earning / Price), you can do (1 / PE Ratio).

[1] If you aren't able to find the number of STOCK units you own or will
purchase, then you are not a casual/institutional investor.

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adventured
Looking at Amazon's stock, one of the more surreal financial things going on
during this pandemic depression, is seeing the Bezos fortune cross $200
billion today while we have 30 million newly unemployed persons in the past
six weeks. Had Jeff and MacKenzie not gotten divorced in the recent past, Jeff
would presently be listed right at about $200 billion today. As it is, Jeff is
up to $150 billion and MacKenzie is at $50 billion. Jeff is nearly worth as
much as Warren Buffett & Mark Zuckerberg combined (#4 and #5). If the tech
juggernaut outperformance (they're levitating apart from much of the economy)
continues for a bit longer, it'll take Bill Gates + Warren Buffett ($180b) to
equal Jeff alone.

It's safe to say Jeff is the wealthiest person that has ever lived, short of
fantastical examples like Genghis Khan. Gates hit near $100b ($152b inflation
adjusted) during the peak of the dotcom bubble. However, logically only some
split of that $100b should be exclusively credited to him, as he was of course
married to Melinda, whereas Jeff is worth $150b alone. By contrast,
Rockefeller was likely never worth more than $25 to $50 billion (inflation
adjusted; at his peak it's thought he might have approached $2b in his day;
the historical record is certain he crossed $1b; the reasonable inflation
adjustment back to the 1920s and 1930s is anywhere from 20x to 30x depending
on how aggressive you want to be).

(ignore the stupid, yet persistent claims that Rockefeller would be worth
$300-$400 billion today as an adjustment; those claims are not using any
manner of proper inflation adjustment; instead, that's based on taking
Rockefeller's wealth as a percentage of the US economy at the time, and then
doing the same thing for the US economy today (eg if his wealth equaled 1.5%
of GDP in 1928 or 1937, then 1.5% today would be $330b), a complete non-sense
approach for numerous obvious reasons)

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foxknox
All the speculators saying Amazon should be making big from covid might be
feeling a little low today.

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dzonga
aws is straight printing money. & will likely continue to do so for many
quarters to come. $10bn revenue for the qtr.

~~~
greenyoda
Why is that guaranteed? If a lot of companies that are using AWS experience
declining business activity or even complete shutdown due to the recession,
why couldn't AWS's revenues decline?

