Amazon had its first $100 billion quarter as record sales continued due to many shoppers buying online because of the COVID pandemic. The company also revealed that Amazon founder and CEO Jeff Bezos will step down as CEO and transition to the role of Executive Chair in Q3. Andy Jassy to become Chief Executive Officer of Amazon at that time. Here are some financial highlights:
- Net sales increased 44% to $125.6 billion in the fourth quarter, compared with $87.4 billion in fourth-quarter 2019. Excluding the $1.7 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 42% compared with fourth-quarter 2019.
- Operating income increased to $6.9 billion in the fourth quarter, compared with operating income of $3.9 billion in fourth-quarter 2019.
- Net income increased to $7.2 billion in the fourth quarter, or $14.09 per diluted share, compared with net income of $3.3 billion, or $6.47 per diluted share, in the fourth quarter 2019.
“Amazon is what it is because of invention. We do crazy things together and then make them normal. 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. 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.”Jeff Bezos, Amazon founder and CEO
eBay Earnings Call Highlights
Here are curated highlights for Amazon sellers and buyers from the Amazon fourth-quarter and full-year earnings call on Tuesday evening. All bullet points are direct quotes. Editorial clarifications are noted in brackets.
Comments from Amazon Chief Financial Officer Brian Olsavsky
- We are proud that more than 500,000 people chose to take new jobs at Amazon in 2020.
- Our Q4 results include approximately $4 billion in COVID-related operating costs, including additional employee pay during the holidays. This Q4 spend brings our total COVID-related costs for the year to more than $11.5 billion.
- We welcomed nearly 175,000 new full and part-time employees in Q4 alone. This compares with 50,000 in Q4 of 2019.
- We also continue to add buildings in our fulfillment and logistics network with square footage growing about 50% year-over-year in 2020.
- We saw strong order volumes throughout the holiday season with good sales growth not only in our peak sales days, which include Prime Day, Black Friday, and Cyber Monday, but also throughout the remainder of the quarter.
- Third-party sellers also stepped up as never before to serve customers. The 2020 holiday season was the best ever for small and medium-sized businesses selling in our store, with our worldwide sales growing over 50% year-over-year in Q4.
- Third-party units represented 55% of total paid units during the quarter, the highest 3P unit mix we’ve ever had since we invited businesses to sell on Amazon more than 20 years ago.
- We made large investments in our transportation network in 2020. That work is not done yet. We have a lot of continued expansion.
- Jeff [Bezos] will be the Executive Chairman of the Board. He will be involved in many large one-way-door issues, as we say, one-way doors, meaning the more important decisions, things like acquisitions, things like strategies and going into grocery and other things.
Comments from Amazon Director, Investor Relations Dave Fildes
- More than half our packages, both US and worldwide are handled through AMZL [Amazon Logistics].
Complete Amazon Earnings Information
Please see the Amazon Investor Relations website for more details on the company’s fourth-quarter and full-year 2020 results.
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