AWS’ annual revenue run rate topped $43.2 billion. Amazon’s sales and earnings crushed estimates.<\/b>
\nAmazon’s second quarter crushed expectations as the company spent more than $4 billion on COVID-19 related costs and still had enough operating leverage to post $5.2 billion in profits. AWS’ annual revenue run rate topped $43.2 billion. The company reportednet income of $5.2 billion, or $10.30 a share, on revenue of $88.9 billion, up 40% from a year ago. Wall Street was expecting Amazon to report second quarter revenue of $81.56 billion with non-GAAP earnings of $1.46 a share.
AWS delivered second quarter sales of $10.81 billion, up 29% from a year ago, and \u00ab\u00a0other\u00a0\u00bb revenue, which is mostly advertising was up 41% excluding currency fluctuations.
Like most quarters of late, AWS generated the most operating income. AWS delivered second quarter $3.38 billion in operating income on $10.81 billion in sales. Amazon’s North American retail unit reported operating income of $2.14 billion on sales of $55.44 billion. International delivered an operating profit of $345 million on revenue of $22.67 billion.
Going into the earnings, Amazon shares were up more than 65% year to date on e-commerce demand amid the COVID-19 pandemic and scale for the company’s cloud and advertising businesses. There were also high expectations for AWS after Microsoft reported strong growthfor commercial cloud as well as Microsoft 365 bundles. Google Cloud also fared well after recently fleshing out its plans.
CEO Jeff Bezos said with what had to be a bit of understatement: \u00ab\u00a0This was another highly unusual quarter.\u00a0\u00bb Bezos then noted the more than $4 billion spent on COVID-19,175,000 new jobs created since March and $9 billion invested in capital projects. Bezos comments come a day after antitrust hearings before a House committee.
On a call with press, Amazon CFO Brian Olsavsky said the profit gains were because the company was able to ship more than expected and customers purchased more profitable items. Olsvasky also said that Prime Day will move to the fourth quarter this year.
Amazon’s outlook was also strong. Amazon projected third quarter sales between $87 billion and $93 billion, or up 24% to 33%. Operating income will be between $2 billion and $5 billion in the third quarter. Amazon estimated it will spend $2 billion on COVID-19 related costs. Wall Street was expecting sales of $86.34 billion.
By the numbers:
Amazon’s complete quarter in review:<\/p>\n