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The Almighty Buck Businesses

Amazon Sales Surge But Bezos Says Coronavirus Costs Could Hit $4 Billion (cnet.com) 53

Posted by BeauHD from the additional-costs dept.
Amazon CEO and founder Jeff Bezos says it will take virtually all of its upcoming second-quarter operating profit to fund protective gear for employees and get products to customers. CNET reports: "If you're a shareowner in Amazon, you may want to take a seat, because we're not thinking small," he wrote Thursday. "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." That spending includes higher wages for workers, more safety gear like face masks and Amazon's internal development of COVID-19 testing capabilities. That spending could drive Amazon to report an operating loss in the second quarter, the company said Thursday. While Amazon's stock hit an all-time high this month, shares tumbled more than 5% after the market's close following Bezos' warning about these additional costs.
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Amazon Sales Surge But Bezos Says Coronavirus Costs Could Hit $4 Billion More

Amazon Sales Surge But Bezos Says Coronavirus Costs Could Hit $4 Billion

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  • Before the virus hit, AMZN was a large part of my pension fund.

    Though I do not regret that in itself, it is unfortunate, that it is now a much larger part of the same fund...

    • Re:AMZN and pension plan (Score:5, Interesting)

      by Cassini2 ( 956052 ) on Thursday April 30, 2020 @06:31PM (#60009224)

      In all likelihood, we will still be fighting Covid-19 in the third and fourth quarters (and possibly into next year.) Amazon will likely be a leader in figuring out how to ship critical goods during a pandemic. They are the biggest, and with size and necessity will come experience. This has to be good for Amazon's profitability relative to its competitors.

      Amazon is likely to become an even bigger percentage of your pension fund.

      I feel sorry for the small neighborhood stores.

      • Amazon will likely be a leader in figuring out how to ship critical goods during a pandemic.

        Nah, just a leader in how to skirt taxes while virtue signaling all the way to the bank as they invest in capital expenses to dominate the market (and maybe even get some stimulus-bucks for the virtue signaling efforts.)

        • Nah, just a leader in how to skirt taxes.....

          Amazon is paying exactly what they owe in taxes. It makes me mad that they don't pay or pay very little in taxes too. But we have to blame the shitty tax laws for that.

          • > But we have to blame the shitty tax laws for that

            And who do you think it to blame for the shitty tax laws? The corporations like Amazon that lobbied to have them written and passed...
            =Smidge=

            • No, it's their business to lobby for loopholes. It's your business to vote for those who would deny them their loopholes.

              • Re: (Score:2)

                by whitroth ( 9367 )

                When they *buy* legislators? Really?

                So, how much do you have to have for a one-on-one with your legislator to lobby against such bills?

                • Politicians tend to make their stance on these things known without a 1 on 1 conversation. You can look at their track record too. It's not about lobbying who ever is elected, it's about electing the right person to begin with.
      • Don't worry. Once President-elect Biden takes the Oath of Office, everyone will forget about this crisis.

      • We have always been at war with the Invisible Enemy. We will always be at war with the Invisible Enemy.

  • Comment removed (Score:3)

    by account_deleted ( 4530225 ) on Thursday April 30, 2020 @06:04PM (#60009176)
    Comment removed based on user account deletion
    • Long term they won't, at least not without extenuating circumstances. If they do drop significantly there's an increasing chance of everything tending towards Mad Max and it really doesn't matter what you invested in. If it was body paint and cattle skulls you might have a leg up on starting your own gang though.

  • Yes, if you're a shareowner you should to take a seat. Not because of profit loss. Amazon doesn't pay dividends and is extremely likely to never pay divedends. Which is kind of the problem. You might want to sit the hell down and think long and hard about whether or not you're the greater fool.

    • With a stock that is about as blue a chip as IBM was in the 80s, that can only go up, in a time when you're hard pressed to find any kind of investment that will at least pay back your investment with halfway decent reliability?

      Yeah, what a fool you must be to buy Amazon stock...

      • Greater fool as in greater fool theory. That is expecting someone will always be willing to pay more than you did for something that has questionable intrinsic value.

        Given Amazon doesn't pay their investors, has increasingly competent competition, is flooded with Chinese FBA sellers that buy good reviews, has labor problems, and the planet is in the middle of a pandemic, and they are explicitly hated by many governments, their value being $2,500 a share is in my opinion pretty damn questionable.

    • Lack of dividends is not a problem. If you want to take cash out, just sell some of your shares.

      Then you pay capital gains tax (15%) instead of marginal income taxes on dividends (~30%).

      So dividends mean higher taxes.

      Dividends also mean the company can think of nothing better to do with their profits than hand them back to the shareholders. And they distribute that money as dividends rather than as share buybacks, screwing the shareholders on taxes.

      I'd rather invest in a company with opportunities to inve

      • Well, sure. And that, rather often, winds up with a business pursuing endless rapid growth. I imagine there have been a few hundred books written about the kind of shit that can cause.

    • Amazon has a good track record of making a lot of money. They haven't paid dividends because they keep diversifying and making more money in more and more different industries.

      Obviously they can't keep growing FOREVER. So when they stop growing they'll either pay dividends, or they will have stopped making money. It seems unlikely that they'll stop making money because even if one of their businesses goes badly, they have several other businesses, and they've made money at whatever they choose to do.

      I thi

      • Very well said. However:

        “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

        To me he does not sound like the kind of person who will ever tolerate dividends.

        • That's true. Of course:

          Apple : Steve Jobs
          Microsoft : Bill Gates
          Amazon : Jeff Bezos

          Microsoft is a Linux company now, so there's no telling what will happen.

  • While the Covid-19 expenses offset gains, without those expenses AmZ would be in the shitter like most other companies. AmZ poised to advance scale and profit long term. AmZ needs healthy employees. Cos that figure out how to operate safer in pandemics will survive, revive , then thrive. Others RIP.

    • While the Covid-19 expenses offset gains, without those expenses AmZ would be in the shitter like most other companies.

      Would they though? The majority of Amazon's operating profit comes from AWS, which is doing quite alright during the lockdown. Their retail business has pivoted toward order fulfillment of essentials, which are much less profitable to ship (heavy and bulky). I wouldn't be surprised if the profit would be unchanged they quit order fulfillment and furloughed all the warehouse staff during the past 2 months.

  • I can't help but notice Amazon is making this decision right after all the media flack about the guy who protested the claimed unsafe working conditions, and all of the negative press in general about the low wages vs. the amount of work they make their people do.

    Seems like it might be a good long-term play for the company to try addressing those complaints under the guise of being a good corporate citizen who is sacrificing because of the COVID-19 situation? Because even after everything opens back up and

  • This will look dumb by roughly mid-May. Hospital admissions in NYC are way, way down. People who are dying now got sick 2-3 weeks ago. Peak of hospitalizations in NYC was April 6th. What this means is, the death rate is about to take a massive nosedive, and with that the pressure to re-open will go up dramatically, so the states will re-open. AMZN's bet against this data is ill-considered at best.

    Source: https://www1.nyc.gov/site/doh/... [nyc.gov]

    • Don't worry. New York will be glad to boost up those virus numbers with people who never actually tested positive!

      https://www.theblaze.com/news/... [theblaze.com]

      • Re: (Score:2)

        by melted ( 227442 )

        Gotta work for that federal handout to compensate for the absolute incompetence of the governor and the mayor. How absolute? It did not occur to them until today that they need to disinfect subway cars for instance. Facepalm.

        https://www.theverge.com/2020/... [theverge.com]

        Jesus rollerblading Christ, it took these geniuses several months to figure this out.

  • amazon market cap is over 1 TRILLON, 4 billion is nothing.

  • They might hiring seo company to reach their goal and spend their money to: overthetopseo.com , websitetraffica.com , seoinc.com , and many more.

  • "That spending includes higher wages for workers" subtly saying that higher (=decent) wages are harmful to the stock-owners and the company as a whole and thus unsustainable?

  • Amazon has been going like gang busters. From fresh foods to deliveries of goods they're pumping. Some neighbourhoods I've been in the delivery trucks seem to be on the road more than cars. I'd think it would be a banner quarter.

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