Pandemic fuels Amazon’s blow-out Q1 financial results

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Amazon CEO and founder Jeff Bezos.
Amazon CEO and founder Jeff Bezos.

US-based tech giant Amazon posted strong results for the first quarter ended 31 March 2021, as online shopping surges as a result of the COVID-19 pandemic.

Among the highlights, the company’s operating cash flow increased 69% to $67.2 billion for the 12 months, compared with $39.7 billion for the 12 months ended 31 March 2020.

Free cash flow increased to $26.4 billion from $24.3 billion, while free cash flow less principal repayments of finance leases and financing obligations increased to $14.9 billion from $14.3 billion.

According to the company, common shares outstanding plus shares underlying stock-based awards totalled 519 million compared with 513 million one year ago.

Net sales increased 44% to $108.5 billion in the first quarter, compared with $75.5 billion in first quarter 2020.

Excluding the $2.1 billion favourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 41% compared with first quarter 2020.

Operating income increased to $8.9 billion in the first quarter, compared with operating income of $4 billion in first quarter 2020.

Net income increased to $8.1 billion in the first quarter, or $15.79 per diluted share, compared with net income of $2.5 billion, or $5.01 per diluted share, in first quarter 2020.

Reuters reports that since the start of the coronavirus outbreak, shoppers have increasingly relied on Amazon for delivery of home staples, and the company sees this trend continuing post-pandemic, particularly for groceries.

While brick-and-mortar stores closed, Amazon has now posted four consecutive record quarterly profits, attracted more than 200 million Prime loyalty subscribers, and recruited over 500 000 employees to keep up with surging demand, it adds.

“Two of our kids are now 10 and 15 years old – and after years of being nurtured, they’re growing up fast and coming into their own,” says Jeff Bezos, Amazon founder and CEO.

“As Prime Video turns 10, over 175 million Prime members have streamed shows and movies in the past year, and streaming hours are up more than 70% year-over-year. Amazon Studios received a record 12 Academy Award nominations and two wins.

“In just 15 years, AWS [Amazon Web Services] has become a $54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating − up 32% year-over-year.”

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