Amazon’s Q2 financial results come in significantly stronger than expected

Written by: Wajeeh Khan
September 28, 2020
  • Amazon’s Q2 financial results come in significantly stronger than expected.
  • The U.S. retail giant says online grocery sales jumped 200% in fiscal Q2.
  • Amazon forecasts £66.32 billion to £70.90 billion of net sales in the third quarter.

Amazon (NASDAQ: AMZN) published its quarterly financial results on Thursday that came in significantly stronger than what the experts had forecast. The company attributed its hawkish performance to the Coronavirus pandemic that fuelled online shopping in recent months.

Shares of the company jumped about 5% in extended trading on Thursday. At £2,443 per share, Amazon is currently just under 70% up year to date in the stock market after recovering from a low of £1,278 per share in March. It is now exchanging hands at a record-high in the stock market. Learn more about how to choose winning stocks.

Amazon’s Q2 financial results versus analysts’ estimates

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According to Refinitiv, analysts had expected the company to print £62.18 billion in revenue in the fiscal second quarter. In terms of earnings per share (EPS), they had anticipated £1.11. In a massive win for those buying stock, the company reported on Thursday that it blew past both estimates posting a much higher £67.78 billion of revenue and £7.85 of adjusted earnings per share in Q2.

The American multinational announced to have expanded its grocery delivery capacity by over 160% in the recent quarter. Its online grocery sales, it added, saw an about 200% increase in Q2 on a year over year basis. The Wall Street Journal said last week that Amazon invests in startups to access information.

As per the online retail giant, Amazon Web Services generated a total of £8.24 billion in revenue in the second quarter, that represents a 29% growth on an annualised basis. In the first quarter, however, revenue growth in AWS was even broader at 33%. Amazon’s CEO Jeff Bezos added £9.91 billion to his fortune in a single day last week.

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Amazon’s guidance for the fiscal third quarter

The Seattle-based tech firm reported £3.22 billion in revenue from its other category that came in 41% higher as compared to the same quarter last year. Lastly, revenue from services registered a 29% growth on a year over year basis to £4.59 billion.

Amazon said that growth in 3rd party sales was seen stronger in the second quarter at 52% versus a 48% growth in 1st party sales.

For the third quarter, the e-commerce giant forecasts £66.32 billion to £70.90 billion of net sales that translate to a 24% to 33% growth on an annualised basis. In terms of operating income that accounts for additional investments related to COVID-19, Amazon expects £1.52 billion to £3.81 billion in Q3.  

At the time of writing, the American multinational company has a market cap of £1.16 billion and a price to earnings ratio of 145.79.