Amazon reported its much-anticipated earnings, beating estimates and reporting its largest all-time revenue of $125.56 billion for the fourth quarter of 2020. The company also announced founder and CEO Jeff Bezos will step down in the third quarter to become executive chair. Andy Jassy will replace Bezos at that time.
The company reported earnings per share of $14.09, compared to the consensus EPS forecast of $7.05 for the quarter according to Zacks Investment Research, based on 15 analysts’ forecasts. Revenue estimate was at $119.7 billion, according to MarketWatch.
“Amazon is what it is because of invention. We do crazy things together and then make them normal,” Bezos said in the earnings statement. “We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more.” He added that “if you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now, I see Amazon at its most inventive ever, making it an optimal time for this transition.”
Josh Perkins, field chief technology officer at AHEAD, a company that builds platforms for digital business, commented on Bezos stepping down, saying that the move even further solidifies the value of the role that Amazon Web Services plays in the broader pan-Amazon strategy. “It is crucial to its operations and the future of its revenue generation potential,” Perkins said in a statement released to GOBankingRates. “AWS was born out of Amazon’s own needs and its commercialization was market-defining. The move makes sense in that Andy’s track record is well-aligned to Jeff’s vision and unflinching commitment to innovation as the focus for the future of the company that he founded.”
Amazon also said it is working to ensure that its front-line employees receive vaccines as soon as possible, and it continues to ramp up its in-house COVID-19 testing program as part of its investments to keep front-line employees safe, according to the statement. More than 700 employees are now tested every hour, and Amazon’s dedicated COVID-19 labs have processed more than one million tests globally.
The company also released its first quarter 2021 financial guidance and expects net sales to be between $100 billion and $106 billion, or to grow between 33% and 40% compared with first quarter 2020. It expects operating income to be between $3 billion and $6.5 billion, compared with $4 billion in first quarter 2020. This guidance assumes approximately $2 billion of costs related to COVID-19, according to the earnings statement.
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