How much does Amazon make over the holiday season?
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Jeff Bezos, who has a less than high philanthropic reputation, recently donated $ 500,000 to the Baby 2 Baby charity, which was founded in honor of the widow of Kobe Bryant. According to Inc. that’s the equivalent of 30 cents to an average household – and they only got it out after someone else had donated more money first. Time reports that despite lofty promises, Bezos donated only 0.7% of his fortune to charity and is one of the very few ultra-wealthy who did not sign the Giving Pledge.
But if Bezos seems to be a bit of a Grinchem this holiday season, then his company is a whole Santa Claus workshop and reindeer that manage shipping and logistics. No matter how much the boss of the company passes on or not, for Amazon, winter is the earning season.
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Just as Amazon was the most visible face of the 2020 e-commerce boom, it looks like Amazon will also close its doors to the pandemic’s online shopping boom.
Amazon stock plunged in late October when the world’s largest internet retailer admitted its entire fourth-quarter earnings could be damaged. That’s because Amazon has spent billions hiring new employees and strengthening shipping operations to survive the holiday season defined by inflation and broken supply chains. He warned investors that his operating income could be zero.
Not only did Amazon disappoint its soft fourth-quarter guidance, it also missed both its top and bottom lines in the third quarter, when earnings slumped the most in four years, according to MarketWatch. Sales also fell in the third quarter and revenues and profits were below Wall Street’s expectations.
As Amazon goes, so go on Christmas
According to Fortune and the Philadelphia Inquirer, many industry watchers fear that Amazon’s recent disappointments herald doom not only during the holiday shopping season, but an overall pandemic e-commerce boom. Apple has also given investors a few reasons to smile with its own quarterly report, adding more fuel to speculate that even the biggest and richest tech companies are struggling to deal with the popandemic waters of inflation and clogged supply chains.
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Granted, Amazon lost a lot of its Q3 revenue and revenue and lowered its holiday sales outlook for the remainder of the quarter – but the bad three months for Bezosa are still impressive.
According to the Philadelphia Inquirer, Amazon has racked up billions of profits every quarter since early 2018. Even if it only makes a profit in the fourth quarter, it would be because the company has spent billions to avoid a holiday catastrophe and retain customers it acquired in the course of the pandemic – which Motley Fool says it most often has.
Amazon ended its record year 2020 with an amazing holiday season. In the fourth quarter of last year, Amazon posted $ 125.56 billion in revenue, compared to the $ 119.7 billion expected by Wall Street. For the first time, the company recorded 12-digit quarterly revenue and hasn’t lost a single pace since then.
The third quarter of 2021 – which investors are so sour – was the fourth consecutive quarter with revenues in excess of $ 100 billion. Amazon not only sustained its 12-digit streak in its supposedly disappointing third quarter, but sales of $ 110.8 billion were 15% higher than in the same quarter in its record 2020 year.
As for the heart of the holiday season, it’s true Amazon has limited its guidance for the fourth quarter – but has fallen back to what? Amazon still forecasts revenues of $ 130 to $ 140 billion. This is an increase of 4% to 12% compared to the same quarter last year, which was the best quarter in Amazon’s history, surpassing $ 100 billion for the first time.
In addition, Amazon got something for all the money it spent in the pre-holiday season – Bezos now employs 30% more people than last year, according to Fortune.
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It’s easy to forget that Amazon deals with more than just selling Instant Pots and Tchotchke. Most of Amazon’s profits come from its cloud computing / web services division – and that never takes a vacation. As investors and analysts were preoccupied with lamenting Amazon’s horrible news – which included forecasts for the biggest holiday season in the company’s history – they somehow overlooked that the Internet Services division had hit $ 16.1 billion in sales, an incredible 39% growth.
In short, Amazon is likely to break its own quarterly revenue record without making a profit and have its biggest holiday season ever, disappointing Wall Street at the same time.
And when all is said and done and 2022 is finally here, Jeff Bezos will have a lot more money he won’t give away.
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